PRO FORMA INVOICE Meaning and
Definition
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A pro forma invoice is a preliminary document issued by a seller to a potential buyer. It serves as a non-binding agreement outlining the estimated costs and terms of a proposed transaction. This type of invoice is typically used before the actual shipment or delivery of goods or services takes place, allowing both parties to assess the financial aspects and prepare accordingly.
The pro forma invoice provides a detailed breakdown of the products or services being offered, including quantities, unit prices, and total amounts. It may also include additional charges such as shipping, handling, or taxes. The invoice typically includes payment terms, such as the due date and accepted forms of payment. However, it is important to note that a pro forma invoice does not request immediate payment or create any legal obligations.
The purpose of a pro forma invoice is to provide the buyer with an estimate of the total costs associated with the transaction, allowing them to plan their budget and make informed decisions. It also allows the seller to showcase their offerings and differentiate themselves from competitors. Additionally, pro forma invoices can be used as a reference for further negotiation and to obtain necessary approvals or financing.
Overall, a pro forma invoice is a preliminary document that outlines the terms and costs of a proposed transaction, providing both parties with a clear understanding of the financial aspects before entering into a formal agreement.
Common Misspellings for PRO FORMA INVOICE
