Performa Invoice is additionally referred to as associate estimate or quote which is, in reality, a preliminary bill of scale. It is sent to customers ahead of a deal going to be finalized. It shows a sellers intention to deliver services or merchandise to customers for a selected worth.
It is not a real bill just a dummy bill according to which the seller has the intent to sell its goods and services to the potential buyer. Proforma invoices include the terms of sales such as payment and details of delivery.
Three important things to keep in the mind when you are sending and creating a proforma invoice:
- It is not exactly a true invoice, issuing a proforma invoice does not mean that the customer has to make any payments on the products or the listed services.
- It is not recorded as an account receivable by the seller because it is not a real invoice as such it is not registered.
- It is not recorded as an account payable & Payroll by the customer as the payment is not expected which means it is not marked as such.
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