VATREC9010 - Pro-forma invoices: Introduction

The primary function of an invoice is to provide formal confirmation of a specified supply of goods or services.

Pro-forma invoices may be broadly defined as commercial documents that contain some or all of the information normally contained on an invoice, but which do not fulfil that primary function.

Pro-forma invoices are used in a variety of commercial situations. They are frequently used to offer goods or services to customers who are:

• not known to the supplier, or
• of doubtful creditworthiness.

The pro forma invoice:

• details the goods or services which will be supplied if payment is made; and
• provides the document against which payment is invited.

Unless payment is received, the goods or services will not be supplied. If payment is made, the goods or services will be supplied and a VAT invoice should be issued for accounting purposes.

A pro-forma invoice, in normal circumstances, cannot be considered to be an accounting document and has no place in the books of account of the trader either issuing or receiving it.

Pro-forma invoices should always be clearly described as such and should preferably be endorsed “This is not a VAT invoice”.