Proforma Invoice vs Commercial Invoice: The Difference Explained
Proforma and commercial invoices look alike but serve different purposes. See the exact differences, which comes first, and why banks require them to match.
A proforma invoice is a preliminary quote; a commercial invoice is the final bill. The proforma comes first — the buyer uses it to approve the purchase, open a letter of credit or apply for an import licence. The commercial invoice is issued once the shipment is firm and is what customs, the bank and the buyer act on.
If you ship internationally, you will create both — often for the same shipment, weeks apart. They look similar, use overlapping fields, and are frequently confused. They are not the same document, and mixing them up can delay a letter of credit, an import licence application, or payment itself.
What Is a Proforma Invoice?
A proforma invoice is a preliminary quote, not a demand for payment. It tells the buyer what you intend to sell, at what price, and under which terms, before the shipment is final. Buyers use it to apply for import licences, open a letter of credit, or get internal purchase approval. Nothing about a proforma invoice is legally binding in the way a commercial invoice is. See our proforma invoice guide for the fields it should carry, or start from the free proforma invoice template.
What Is a Commercial Invoice?
A commercial invoice is the formal billing document that travels with the goods. Customs uses it to assess duty and value the shipment. Banks use it when examining documents presented under a letter of credit. The buyer uses it to actually pay you. It is issued once the shipment is firm — not before. See our commercial invoice guide for the full field-by-field breakdown.
Proforma Invoice vs Commercial Invoice: Side-by-Side
| Aspect | Proforma Invoice | Commercial Invoice |
|---|---|---|
| Purpose | Preliminary quote / offer | Formal bill for goods shipped |
| Issued | Before shipment, before terms are final | Once the shipment is firm, alongside dispatch |
| Payment obligation | None — not a demand for payment (advance payment may be requested against it) | Yes — the buyer's payment is due against it |
| Used by customs | No | Yes, for valuation and duty assessment |
| Used under a letter of credit | To help open the LC | Presented as one of the required documents |
| Recorded in your books | No — it isn't a sale yet | Yes — it records the sale and the receivable |
| GST (India) | None — not a tax invoice | Carries the export GST line (LUT or IGST paid) |
| Validity date | Yes — prices hold until it expires | No — it records a completed sale |
| Can it change? | Yes, until the deal is confirmed | No — figures should match the proforma and LC |
Why These Documents Must Match
The details that matter most — description of goods, quantities, unit prices, Incoterms, currency — should carry through from the proforma to the commercial invoice without unexplained changes. When a commercial invoice disagrees with the letter of credit or with the proforma the buyer used to open it, banks and customs treat it as a discrepancy. That is one of the most common reasons a first presentation gets queried or refused, and it is almost always preventable — see why export documents get rejected for how banks handle these mismatches.
Which Comes First: Proforma or Commercial Invoice?
The proforma always comes first. The practical workflow: issue a proforma invoice to lock in price and terms and let the buyer arrange financing or licensing. Once the shipment is confirmed, convert that proforma into a commercial invoice for the goods actually shipped. If you retype everything by hand at that stage, small mismatches creep in — a quantity, a unit price, an Incoterm. See converting a proforma into a commercial invoice without re-typing for what should carry over and what to re-check, and the free commercial invoice template for the manual version.
Frequently Asked Questions
Is a proforma invoice the same as a commercial invoice?
No. A proforma invoice is a preliminary quote used before a sale is final; a commercial invoice is the binding bill issued once the shipment ships and is used for customs valuation, LC negotiation, and payment.
Is a proforma invoice legally binding?
No. It's an offer on stated terms, not a demand for payment. Once the buyer accepts it, for example by paying an advance or opening an LC, the agreed terms usually carry into the sales contract, but the proforma itself isn't the bill.
Can a proforma invoice be used for customs clearance?
Generally no. Customs authorities require a commercial invoice for valuation and duty assessment. A proforma invoice may support an import licence application, but it does not replace the commercial invoice at clearance.
Do banks accept a proforma invoice under a letter of credit?
A proforma invoice is often used to open the LC, but the bank will require a commercial invoice — matching the LC's terms exactly — at the document presentation stage.
Which comes first, proforma or commercial invoice?
The proforma invoice comes first, while terms are still being agreed or financing is being arranged. The commercial invoice follows once the shipment is confirmed and ready to move.
Is GST charged on a proforma invoice?
No. A proforma isn't a tax invoice, so it doesn't carry GST or go into your GST return. For Indian exporters, the GST treatment (export under LUT or on payment of IGST) goes on the commercial invoice.
Does a proforma invoice need a signature?
It's good practice, though requirements vary by buyer and country. Some import licence or LC-opening processes expect a signed and stamped proforma; check with your buyer or their bank before assuming it's optional.
What happens if the commercial invoice doesn't match the proforma?
If figures diverge — quantity, price, Incoterms — without an agreed amendment, the bank can raise a discrepancy against the LC, and customs may query the declared value. Any change should be documented and reflected consistently across every document in the set.
Bilexor keeps the proforma and commercial invoice tied to one shipment record, so the numbers that must match — do. 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.