Proforma Invoice vs Purchase Order: Key Differences
A purchase order and a proforma invoice both show up before a shipment is final, and exporters often confuse them. Here's who issues each and why.
A purchase order and a proforma invoice can look interchangeable — both show a proposed deal before goods ship, both list price and quantity, and both get referenced when a letter of credit is opened. The difference comes down to who issues the document and what it commits them to.
What Is a Purchase Order?
A purchase order (PO) is issued by the buyer. It's the buyer's formal request to purchase specific goods, at an agreed price and quantity, under stated terms. Once the seller accepts it, a PO is generally treated as a binding commitment from the buyer's side.
What Is a Proforma Invoice?
A proforma invoice is issued by the seller, usually in response to a PO or an inquiry. It's a preliminary quote confirming what the seller will ship, at what price, under which terms — used by the buyer to arrange financing, apply for an import licence, or open a letter of credit. See our proforma invoice guide for what belongs on it.
Purchase Order vs Proforma Invoice: Side-by-Side
AspectPurchase OrderProforma InvoiceIssued byThe buyerThe sellerPurposeFormal request to buyPreliminary quote / offer to sellTypical sequenceOften issued first, or in response to a quoteOften issued in response to a PO or inquiryBinding?Generally yes, once acceptedNo — indicative until the deal is confirmedUsed to open an LC?Sometimes referencedCommonly used directly for LC applicationsHow They Fit Together
A typical sequence: the buyer sends a PO (or the seller sends a quote the buyer accepts), the seller issues a proforma invoice confirming the terms, the buyer uses that proforma to arrange payment or licensing, and once the shipment is firm the seller issues a commercial invoice. Figures should carry through consistently at each stage — a PO quantity that doesn't match the proforma, or a proforma that doesn't match the eventual commercial invoice, is exactly the kind of gap that causes a letter of credit discrepancy.
Frequently Asked Questions
Do I need both a purchase order and a proforma invoice?
Not always — some deals move straight from an accepted quote to a proforma invoice without a formal PO. Larger buyers and LC-based deals more often expect a PO on file, since it documents the buyer's side of the commitment.
Which one is used to open a letter of credit?
The proforma invoice is more commonly used directly for LC applications, since it comes from the seller and states the exact terms — price, quantity, Incoterms — the buyer needs their bank to reference.
Bilexor carries buyer, quantity, and price details from a proforma through to the commercial invoice on the same shipment record, so nothing drifts between the stages. See how it works.
Informational only — not legal, banking, tax, or customs advice. Always verify document and LC requirements with your bank, CHA / customs broker, and buyer before presentation.