A proforma invoice and a commercial invoice can carry the same line items and totals, with the same logo, but only one is a real bill. For a $24,000 order from a first-time Canadian buyer, the purchasing team may ask for a proforma invoice before wiring a $7,200 deposit, even though the document looks like your normal invoice.
The two documents do different jobs at different moments in a sale, and the label tells buyers, bookkeepers, banks, and customs teams how to treat the document. A proforma sets the expected price and scope before the sale is final. A commercial invoice collects payment and clears customs after the buyer commits.
What is a proforma invoice?
A proforma invoice is a preliminary invoice you send before the buyer finalizes a sale, laying out expected pricing and scope. It works like a formal quote built in the structure of an invoice. Buyers ask for it because they can route a proforma through their approval process the same way they'd route a real bill.
You can use a proforma invoice for domestic sales too. Send one to lock a price before ordering materials or to satisfy a customer's internal purchase-approval process. A wholesaler pricing a large order and a contractor confirming a renovation scope use it the same way: to get sign-off on the numbers before the sale is on the hook.
Because it's a preview, keep a proforma out of tax records and accounts receivable. Treat it as a decision document with enough detail to approve the sale, while your books rely on the commercial invoice as the billing record.
Use the label "proforma invoice" clearly so no one mistakes the document for the final bill. Buyers do sometimes pay a deposit against a proforma anyway; keep that cash separate and apply it to the commercial invoice once the sale is final.
What is a commercial invoice?
A commercial invoice is the final, binding bill you send to request payment under the stated terms. You send it once the buyer commits and the goods ship or you deliver the work. At that point, the buyer owes the amount under the terms on the invoice.
The commercial invoice also gives your bookkeeper the transaction to record and starts the clock on your payment terms. In small business invoicing, your bookkeeper uses the commercial invoice to record the sale, track the due date, and follow up if the balance goes overdue.
On international shipments, the commercial invoice does a second job as the primary customs document. Authorities use it to classify the goods and assess duties. Customs can hold shipments when paperwork lacks the invoice, leaves out required details, or conflicts with the rest of the shipment documents.
Customs paperwork is part of small-business exporting, too. According to the U.S. Census Bureau, SMEs accounted for over 97% of identified U.S. exporters and nearly 35% of known export value in 2024. The commercial invoice is small-business paperwork far more often than it's corporate paperwork.
How the two invoices work
A proforma invoice proposes a sale; a commercial invoice bills one. The documents differ in timing, payment obligation, accounting treatment, and customs use.
Proforma invoice | Commercial invoice | |
|---|---|---|
Purpose | Previews price, quantities, and terms before the sale is final | Bills the buyer for a finalized sale |
When you issue it | Before goods ship or work begins | Once the buyer commits and goods ship or work is delivered |
Payment obligation | None; the buyer can walk away | Payment is due under the stated terms |
Accounting treatment | Don't record it in accounts receivable | Post it to accounts receivable |
Customs role | Sometimes requested early in the process; can't clear customs on its own | Primary customs document for international shipments |
Labeling | Mark it "proforma invoice" | Standard invoice with number, dates, and terms |
Payment obligation creates most of the confusion because buyers can approve a proforma or walk away without owing anything. If they wire a deposit against a proforma, they're paying early by choice—the document itself doesn't demand payment. Once you send the commercial invoice, payment is due under its stated terms.
Accounting treatment follows the same split. The commercial invoice is what your bookkeeper records. The label carries that signal outward too: a document marked "proforma invoice" tells the buyer, the bank, and customs that the terms aren't yet binding.
When does a proforma invoice become a commercial invoice?
Issue the commercial invoice when the buyer commits. A buyer usually commits by formally accepting the terms, often through a purchase order referencing the proforma's numbers. Commitment can also happen when a deposit or partial payment lands, or when goods are ready to ship or you finish the work. Any customs filing at that stage needs the commercial invoice.
Treat those triggers as the point when you issue a new commercial invoice. The proforma can stay in the email thread or quote folder as backup for the buyer's approval, but the commercial invoice needs its own invoice number and issue date, plus payment terms that match the final sale. Matching the final invoice to the accepted terms keeps the receiving and accounting teams aligned with the customs paperwork for the same sale.
If none of those events happen, the proforma expires with the deal, and nothing needs to come out of your books because nothing was ever posted.
Handle deposits separately because the cash arrives before the final invoice exists. A deposit against a proforma is cash received for a sale you haven't invoiced yet, so keep it separate from operating cash and don't spend it as earned revenue. A dedicated checking account with Relay is a simple way to hold buyer deposits apart from the operating balance, and automated transfers (available on all Relay plans) can move a set percentage of each deposit into reserves the moment it arrives.
When you send the commercial invoice, apply the deposit against the balance so your bookkeeper can record it cleanly. Orders paid in stages follow the same logic, and milestone payment strategies work best when each payment has a clear place to land and a clear invoice to reconcile against.
What to include on each invoice
The proforma mirrors your standard invoice layout, clearly labeled "proforma," with expected prices and quantities, plus a validity period. The commercial invoice adds the fields that make it binding and customs-ready:
Invoice number and issue date
Payment terms and due date
Harmonized System (HS) codes for international shipments
Incoterms, the agreed split of shipping responsibility and risk
Country of origin
Final quantities and totals
Requirements vary by destination country. Before shipping to a new country, check the U.S. International Trade Administration's commercial invoice guidance. Some countries require a specific form, though most accept the seller's version when the seller includes all required information.
Speed matters here as much as accuracy. The faster the final invoice goes out and reaches your books, the sooner its payment terms take effect. Once the buyer commits, the invoice needs to reach the buyer and your books quickly. Relay's two-way QuickBooks Online sync keeps the accounting side current without re-keying transaction activity.
Mistakes that delay payment or shipments
Most proforma problems come from treating the two documents as interchangeable. Four mistakes come up repeatedly:
Sending a proforma as the customs document. Customs clears shipments against the commercial invoice, and customs can flag or hold goods traveling on a proforma at the border.
Letting commercial invoice values drift from the proforma. Unexplained changes trigger disputes and payment delays with the buyer, and mismatched values raise questions at customs.
Recording a proforma in accounts receivable. It overstates what you're owed and pollutes your accounts receivable (AR) aging report with money no one has agreed to pay.
Never issuing the commercial invoice after a deposit arrives. The sale never formally bills, and the deposit sits unreconciled against nothing.
Small businesses handle proforma and commercial invoice paperwork from the first cross-border sale. A first cross-border sale is often a Canadian one, and the documentation rules apply from shipment one.
Send the right invoice at the right moment
Choose the trigger before you send the proforma. The trigger might be buyer acceptance, a deposit, goods ready to ship, or delivered work. Once that trigger happens, issue the commercial invoice, apply any deposit against the balance, and give your bookkeeper the document that belongs in accounts receivable.
Invoice timing gets easier when deposit cash has a place to sit before it becomes earned revenue. Relay gives deposit money a separate lane from operating cash, so the proforma-to-commercial handoff doesn't turn into a cleanup job for your books. LLCs and corporations get up to 20 accounts on Starter and Grow and up to 50 on Scale, so a deposit lane, an operating balance, a tax reserve, and a lane per major buyer can each live in its own account; sole proprietors get up to 10 accounts on every plan, which is still enough to separate deposits from operating cash without juggling logins at another institution.
When the commercial invoice goes out, clean separation makes reconciliation faster; opening a Relay account pairs that multi-account structure with automated transfer rules that move deposit percentages into reserves as cash arrives.
Frequently asked questions
Is a proforma invoice legally binding?
No. A proforma invoice states expected terms for approval. The commercial invoice is the document that asks for payment under its stated terms.
Can I use a proforma invoice for customs clearance?
Generally no. Ship international orders with the commercial invoice. A proforma may be requested earlier, but customs won't clear a shipment on it.
Does a proforma invoice go into my accounting software?
You don't need an entry. Save the proforma as backup for the approval; the commercial invoice is what posts to your books.
Can a buyer pay from a proforma invoice?
Yes. Buyers sometimes send a deposit against a proforma to secure production or shipping, even though the document requires no payment. Once you issue the commercial invoice, that prepayment applies against the invoice balance.
What's the difference between a proforma invoice and a quote?
Functionally, very little. A proforma carries the format and detail level of a final invoice, which is why procurement teams prefer it—they can route it through approval as if it were the real bill. A quote communicates the same pricing with less formal structure.
