Short answer
A proforma invoice is a non-binding offer given by the seller to the buyer. It creates no accounting entry and is not a request for payment. It is used for the buyer to obtain an import permit, open a letter of credit, or secure budget approval. Because a letter of credit is opened based on the proforma, the description of goods on it must be consistent with the documents that follow.
What a proforma invoice is, and is not
A proforma invoice is a written offer given by the seller to the buyer.
What it is not: it is not a binding sales document, it creates no accounting entry, it does not amount to a request for payment, and it is not used as the basis for customs value.
What it is for: it is used for the buyer to obtain an import permit, open a letter of credit, secure budget approval, and justify a request for advance payment. In many countries an import-permit application cannot be filed without a proforma.
What fields it must contain
| Field | Why it is needed |
|---|---|
| Seller and buyer details | Full legal name and address of the parties |
| Proforma number and date | Reference and traceability |
| Description of goods | The letter of credit and customs declaration are derived from it |
| GTİP | For the buyer’s duty and permit calculation |
| Quantity and unit | Pieces, kg, m² — the unit must be stated clearly |
| Unit price and total price | Together with the currency |
| Incoterms and place of delivery | Determines what the price covers |
| Payment method and term | Advance, documentary, letter of credit |
| Validity period | Until when the offer is considered binding |
| Country of origin | For the buyer’s preferential-regime calculation |
| Packaging, gross/net weight, dimensions | For the transport quote and customs |
| Bank details | For payment |
Two fields are particularly often left out, and both prove costly: Incoterms and validity period.
Why Incoterms is essential
If the delivery term is not written, what the price covers remains unclear. Who bears freight, who bears insurance, who bears export customs — all become open to dispute.
The correct format includes both the rule and the place together:
FCA Gebze, Türkiye (Incoterms 2020)The more precisely the place is described, the less room there is for differing interpretation.
The letter-of-credit connection
A letter of credit is opened based on the proforma. The bank generally copies the description of goods in the letter-of-credit text from the proforma.
The result: the description of goods on the proforma binds the commercial invoice that will be issued months later. If the two do not match, a discrepancy arises; the bank may refuse payment, and payment then becomes dependent on the applicant accepting the discrepancy.
For this reason, the description on the proforma should be neither too general nor overly detailed. Too general increases the risk of a customs inspection; too detailed means even a small deviation produces a mismatch.
Common mistakes
Not writing Incoterms. What the price covers remains unclear.
Not setting a validity period. When freight and raw material prices change, you remain bound by the old offer.
Writing the description of goods too generally for use on a letter of credit. A description like “machine parts” creates both inspection risk and a discrepancy risk.
Not writing the GTİP. The buyer cannot work out duties and permits; the order decision is delayed.
Using the proforma in place of the commercial invoice. A commercial invoice is required for the customs declaration; the proforma does not substitute for it.
This page is general information, not legal advice. Regulations change; confirm the current position before acting.