Estimate: definition, mandatory data and model

Estimate: definition

Proforma invoice comes from the Latin “pro forma” which means “for form”. This type of invoice has an informative role in the commercial offer, but has no accounting or legal value.

It is a commercial document used to set out the costs and financial details and practical terms of a proposed transaction to a potential client before it is executed.

What is the promissory note for?

Type of invoice used by customs

Proforma invoices are mainly used in customs matters, their preparation may be necessary to obtain approval for import or export.

Use in international trade

In international trade, it plays a role in the documentary letter of credit to secure the transaction. Before that, it serves to determine the costs of shipping the goods covered by the contract.

It can also be used on a preliminary basis to obtain customer consent before executing a transaction and invoicing for payment.

>> Establishment of a company or association, management of invoices and drafting of statutes: entrepreneurs, all our services to support you in your endeavors

Why request an estimate?

The bank often asks for a promissory note when a company or professional requests a loan for the purchase of equipment.

It also allows you to make a cash advance to tide you over while you wait for your invoice to be paid.

The bank will then request a proforma invoice to justify the amounts. In the first case, it will be an estimate for the planned equipment.

In the second case, the bank will request that the proforma for invoicing be issued by the borrower company.

What are the differences between a proforma invoice, a regular invoice and an offer?

Although different from these two other documents, the proforma invoice in no way prevents you from making an offer or a traditional invoice before closing the sale.

Classic invoice

Unlike a promissory note, a classic invoice is an official accounting document that records the delivery of goods or the performance of an invoiced service. It is issued after the completion of the commercial transaction (proforma invoice is issued before the transaction) and serves as a request for payment of the agreed amount.

Assessment

Without book value, the offer is also a preliminary document for the agreement with the buyer. In general, it is used to describe and evaluate products or services that are the subject of a sales contract.

If the customer accepts it, it will serve as the basis for creating the final invoice. It is a step that precedes the estimate when necessary, but it can also serve as an offer.

What are the mandatory data on the proforma invoice?

Same parts as classic invoice

Even without book value, the estimate must still respect a certain formality. In principle, it must contain the same parts as an ordinary invoice, except for the invoice number (which must not appear in the order of ordinary invoices) and the terms of payment.

Examples of mentions that will appear

In particular, it must contain the following information, along with the words “provisional invoice” and the date:

the name of the seller’s company (with headquarters address, siren number, legal form and VAT number within the community);
Customer contact information (name, address and VAT number within the community);
A detailed description of the goods or services that are the subject of the transaction (with quantity, unit price, labor price, etc.);
The total amount to be paid excluding tax;
Rate and amount of applicable VAT
Amount including tax
Duration of the offer (mark of its validity).

It’s good to know : for export, the invoice structure and required information may differ depending on different countries and their specific regulations.

Proforma invoice template

Company name (company form and company name)

Siren or Siret number

RCS number and location

Adress of the headquarters

Phone number/e-mail address

VAT number within the community:

Pre-invoice number:

Date of issue :

Validity:

HAVE:

Customer name/company name

Registered address

VAT number:

Signature: