Recommendation Proforma Meaning In Accounting

A pro forma invoice.

Proforma meaning in accounting. Proforma invoices are sent as a courtesy to the buyer. Provided as a courtesy. It typically contains a date of issue a description of what is being sold and the total amount payable as well as any taxes or fees that may be incurred between the time of issuing and when the delivery is made.

A proforma invoice is a document that is either sent with goods shipped internationally to determine their value or sent as a commitment by a supplier to deliver goods to the customer. Pro forma Latin for as a matter of form or for the sake of form invoices often come into play with international transactions especially for customs purposes on imports. The proforma invoice is normally used in two ways and they are popular documents for both purposes.

Definition of Pro Forma Financial Statement A pro forma financial statement is one based on certain assumptions and projections as opposed to the typical financial statement based on actual past transactions. Unlike an invoice a proforma invoice is an estimate or a quote that outlines the goods and services that a seller commits to selling. Pro forma earnings are based on an alternative measure of performance that excludes various costs at the discretion of the reporting entity.

In other words it is a preview of the actual invoice if the sale transaction is completed. A proforma invoice can be referred to as an initial bill of sale shared with the buyers in advance prior to delivery of goods or services indicating a sellers intent to complete the sale. Theyre a way for you to test out situations you think may happen in the future.

Pro forma Latin for for the sake of form is usually used to describe a document which is provided as a courtesy or satisfies minimum requirements conforms to a norm or doctrine tends to be performed perfunctorily or is considered a formality. There are other advantages to pro forma invoices too. The goal of a proforma invoice is to avoid exposing your customer to any unanticipated charges or duties.

It will usually contain details such as a description of the items being sold their price and the total. A proforma invoice is a bill of sale that is sent to a customer before goods and services are delivered by your business. Unlike a contract professional invoice or a purchase order a proforma invoice is not considered a legal document.