Proforma invoice for prepayment or a deposit

When to send a proforma invoice for prepayment

A proforma invoice sets out a sale before it happens, in the same layout as the final invoice, so your customer can pay in advance or approve the spend. Use it when you want money before you start: a custom or bulk order, an event booking, a new customer, or a company that needs a document to raise a purchase order against.

It is not a tax invoice and not a record of a completed sale. Once you deliver, issue the final invoice with the actual amounts and show the prepayment as already paid. If the customer’s accounts team needs a real invoice to release a deposit, send a deposit invoice instead.

What to include

• The words “Proforma invoice” and a number from its own series (PRO-), so it never takes a number from your invoices.
• Your details and the customer’s: names, addresses and, for business customers, the PO or order reference in the reference field.
• Each item or service with quantity, unit price and line total, exactly as it will appear on the final invoice.
• Tax as it will be charged, and delivery or setup costs. Use + Shipping or fee for delivery.
• How much to pay now, by when and how: the full amount, or a deposit such as 50%, with your bank details or payment link in the notes.
• A validity date, because prices and stock change. Pick a preset under “Valid for”.
• What happens next: lead time after payment, and that the final invoice follows delivery. Add “This is not a tax invoice.”

General information, not legal or tax advice. When tax falls due on an advance payment depends on where you are registered. In the UK and the EU, VAT on a payment received in advance is generally due when the payment is received, so check whether you need to issue a VAT invoice for it. See invoice requirements by country.

Worked example: prepayment for a custom order

The sample on this page is a print shop asking a local business to prepay 120 custom T-shirts before printing starts. It gives a 5% volume discount and adds delivery as a separate charge, so the customer sees what the order costs and what delivery costs.

The tax rate is left at 0 in the sample, so no tax line appears; set your own rate if the order is taxable where you are. Delivery is added after tax and is not discounted. If delivery is taxable for you, add it as a line item instead so it is included in the tax base. The note asks for full prepayment before printing and says the document is not a tax invoice.

Asking for a deposit instead of the full amount

List the whole order at full price, then say in the notes how much to pay now: “Please pay a 50% deposit of $3,400.00 to confirm the order; the balance is due on installation.” The total on the proforma stays the full order value, which is what the customer approves. When the work is done, the final invoice shows the full price, the deposit with + Payment received, and the balance due.

Open a proforma that requests a 50% deposit

The deposit invoice guide follows one job from quote to final payment, including the receipt you give when the deposit arrives. The contractor and graphic design invoice templates show a final invoice with the deposit deducted.

Proforma invoice vs invoice

A proforma comes first and describes a sale you expect to make; the customer may pay against it, but it is not entered in your sales records as an invoice. The invoice comes after delivery, records the actual sale, carries the tax details your tax authority requires and is what you count as income. Compare all four document types, including estimates, on the invoice generator page.

Selling abroad?

Export orders need more than this page offers: HS codes, country of origin, weights and volume, an Incoterms® rule, bank details for an international transfer and later a commercial invoice for customs. Use the export pro forma invoice generator on Quotepad, our sister site, which also turns a pro forma into the commercial invoice for the shipment.