A pro forma invoice is a preliminary bill sent before goods or services are delivered. It shows what the final invoice will look like so the buyer can approve it, raise a purchase order or arrange payment, but it is not a demand for payment and it is not a valid tax invoice for VAT purposes.
When South African businesses use a pro forma
- Payment before delivery: suppliers who require payment upfront send a pro forma so the buyer can pay, then issue the tax invoice when the goods are supplied.
- Purchase orders: corporate and government clients often need a pro forma to raise a PO before work starts.
- Imports and exports: customs and freight forwarders use pro formas to declare the value of goods before the commercial invoice exists.
- Approvals: a client wants to see the exact final figure, including VAT, before committing.
What to include
Everything a normal invoice would show, clearly labelled "Pro Forma Invoice": your details, the client, a reference number, date, itemised lines, VAT and total, banking details and a validity period. Add a line such as "This is not a tax invoice. A tax invoice will be issued on payment / delivery."
Pro forma vs quotation
They overlap, and in many small businesses the quotation does the job. The distinction is mostly about the client's process: a quotation is what you send to win the work; a pro forma is what you send when the work is agreed but a tax invoice cannot be issued yet. See quotation vs invoice.
VAT treatment
A pro forma is not a tax invoice, so the buyer cannot claim input VAT on it and you do not declare output VAT on it. Issue the real tax invoice within 21 days of the supply, as required by the VAT Act.
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