What is a proforma invoice?
A proforma invoice is a preliminary bill that a seller sends before shipment, describing the goods, quantities, prices and terms of an order. It works as a quote and a commitment to supply at the stated price and date, and it later becomes the basis of the final commercial invoice. Example (round numbers): a Nigerian importer receives a proforma invoice for 25,000 dollars of solar panels with 30% due on order. It registers the import on a Form M with its bank, attaching the proforma, and sends the 7,500 dollar deposit quoting the proforma number.
- A proforma invoice is the seller's quote and commitment before shipment; it is not a demand for payment of a completed sale.
- The International Trade Administration notes that it eventually becomes the final commercial invoice used for customs clearance.
- Deposits, import registrations and letter of credit applications are often based on the proforma invoice.
- In Nigeria, a Form M registered with the bank attaches the proforma invoice before the goods ship.
- Any later change in price, quantity or bank details should be confirmed directly with the supplier.
How a proforma invoice works
The International Trade Administration describes the proforma invoice as a negotiating tool between seller and buyer before an export shipment. It describes the goods, including quantity, price, weight, kind and other specifications, and declares that the seller will provide them at the specified date and price.
| Point | Proforma invoice | Commercial invoice |
|---|---|---|
| When it is issued | Before shipment, often before the order is confirmed | At or after shipment |
| Purpose | Quote, commitment to supply, basis for deposits and permits | Bill for goods shipped; used by customs to value goods |
| Amount | Expected price and terms | Final price, charges and discounts |
| Used for | Deposit payments, import registration, LC applications | Customs entry, LC and collection documents, accounting |
Sources: ITA, Common export documents; 19 CFR 141.86. As published on 29 October 2026.
Where a business meets it
- Deposits. Many suppliers ask for a deposit against the proforma invoice before starting production.
- Import permits. Some countries require registration before payment; Nigeria's Form M, for example, attaches the proforma invoice, the insurance certificate and any product certificates.
- Letters of credit. The importer's bank often drafts a letter of credit from the agreed terms.
- Payment checks. Banks and payment providers may ask for the proforma invoice to understand a large first payment to a new supplier.
Common mistakes
- Paying changed bank details. Confirm any new supplier bank account by phone on a number you already hold.
- Letting it expire. Quotes carry validity dates; a late deposit may face a new price.
- Leaving out the Incoterm. Without it, freight and insurance costs are unclear.
- Mismatch with the final invoice. Large differences between proforma and commercial invoice raise questions at customs and at the bank.
Related terms and how Helm handles it
Helm sends deposits to suppliers by SWIFT or by local rails in the supplier's currency where available, with the rate, fee and expected arrival shown before sending. A named account manager answers review questions in writing within one business day. Helm agrees pricing with each business in writing before the account opens.
Open a Helm account
USD, EUR and GBP accounts in your company's name, with a named account manager.
Open accountQuestions
Is a proforma invoice a legal invoice?
It is a quote and a commitment to supply on the stated terms, not a bill for goods already delivered. The final bill is the commercial invoice issued at shipment.
Can I pay a deposit against a proforma invoice?
Yes, it is common for suppliers to ask for a deposit against a proforma invoice. Check the supplier's bank details independently before paying, and quote the proforma number in the payment reference.
What should a proforma invoice include?
The seller and buyer, a description of the goods with quantity, price, weight and specifications, the total, the Incoterm and named place, payment terms, the validity date and the seller's bank details. Some import rules ask for more, so check with your buyer or freight forwarder.
Why does my bank ask for a proforma invoice?
Banks and payment providers use it to understand what a payment is for, and some countries require it to register an import before foreign currency is released. In Nigeria, for example, the Form M registered with the bank attaches the proforma invoice.
References
- International Trade Administration: Common export documents
- FirstBank Nigeria: Forms A, M and Q
- Legal Information Institute: 19 CFR 141.86, contents of invoices and general requirements
This guide is general information for businesses, not financial, legal or tax advice. Rules, fees and timings were checked against the sources listed on the review date and may change.