Objective of Proforma Invoice

Proforma Invoice is used under the following situations :

1. The amount mentioned in the invoices is the one which the buyer has to pay in advance of the delivery. Or the invoice may be sent along with the shipment. In this case the invoice amount is to be paid at the time of delivery.
2. When the seller decides that he must get the payment in advance he uses it. In the case of export the proforma invoice is presented to the custom authorities to enable them to assess the value of goods. On the ground of it import or export duty is imposed.
3. When the seller hands over the goods to his agent, the agent doesn't pay until the goods are sold. In this case the seller issues proforma invoices to the agent.
4. The seller may use it as a quotation form.
5. The proforma invoice may be issued along with the goods sent on approval. If they are accepted, the buyer will have to make payment in accordance with the proforma invoice.