Home > Topics > Financial Accounting II > Proforma Invoice

Proforma Invoice 📄

Scenario:

  • Raj sends 1000 shirts to Simran.
  • He cannot send a "Bill" or "Tax Invoice" because he hasn't sold them to her.
  • So, he sends a document describing the goods (Quantity, Quality, Price).
  • This document is called a Proforma Invoice.

Definition: A statement prepared by the Consignor and sent to the Consignee along with the goods. It contains details like quantity, weight, measurement, price, and other specifications.

Purpose 🎯

  1. Information: Tells the Consignee what is being sent.
  2. Price Guide: Tells the Consignee the minimum price at which to sell.
  3. Customs: Used for clearing goods through customs/check-posts.
Proforma Invoice vs Invoice

Invoice: Creates a debt. "You owe me ₹10,000". (Sent on Sale). Proforma Invoice: Information only. "Here are goods worth ₹10,000". (Sent on Consignment).

Quiz Time! 🎯

Test Your Knowledge

Question 1 of 5

1. Proforma Invoice is sent by:

Consignee to Consignor
Consignor to Consignee
Customer to Consignee
Bank to Consignor

💡 Final Wisdom: "It looks like an invoice, but it doesn't bite like an invoice. It's just a 'For Your Information' (FYI) document." ℹ️

Next up: Account Sales - The Agent's Report! 📊

← PreviousNext →