A quote or estimate offers a price, a proforma invoice previews the final bill before the sale is confirmed, and a tax invoice is the real demand for payment that counts in your accounts. A commercial invoice is the customs document for exporting goods. Here’s when to use each.
A quote (or quotation) is a price you offer for a defined piece of work or set of goods. An estimate is a looser version: your best guess of the cost, which may change once the work begins. Neither one asks for payment, and neither belongs in your sales records.
Depending on its wording and local law, an accepted quote can form part of a contract, so state how long the price is valid and what’s included. An estimate should say clearly that it’s approximate.
Quotes and estimates are also useful for you: they record the scope you priced, which makes it much easier to discuss changes later. Give each one a reference number in its own series, such as Q-001, so the proforma and final invoice can point back to it.
A proforma invoice looks almost exactly like a real invoice, with items, quantities, prices, tax and a total, but it’s issued before the sale is final. It tells the buyer precisely what they’ll be billed, so they can approve a budget, raise a purchase order, pay a deposit or apply for an import licence or letter of credit.
Legally, a proforma is not a tax invoice. In most countries it isn’t recorded as a sale, it doesn’t create a tax liability for the seller, and the buyer can’t use it to reclaim VAT or GST. It should be clearly titled “Proforma Invoice” and is best numbered in its own series, so it can’t be confused with your real invoices.
An invoice is the formal request for payment once a sale has happened or the work is delivered. It goes into your accounts as income and, where you’re registered for tax, records the VAT, GST or sales tax you’ve charged. Many countries use the term “tax invoice” for the version that lets a registered buyer claim that tax back.
The exact rules vary. In Australia, a tax invoice comes from a GST-registered supplier, says “Tax invoice” and shows the supplier’s ABN, the date, a description and the GST. In the UK, a VAT invoice must show the supplier’s VAT registration number. In India, a GST tax invoice shows the supplier’s GSTIN and splits tax into CGST and SGST or IGST. In the UAE, a tax invoice shows the supplier’s TRN. If you’re not registered for tax, you issue an ordinary invoice instead. Check your own tax authority’s rules for the details.
A commercial invoice is used when you ship physical goods across a border. Customs authorities use it to identify the goods, check their value and work out any duties and import taxes. It often travels with the shipment alongside a packing list and other shipping papers.
As well as normal invoice details, a commercial invoice usually shows the exporter and importer, a detailed description of each item, its tariff (HS) code, the country of origin, quantities, weights, the agreed delivery terms (Incoterms) and the currency. Requirements differ by destination, so check with your courier, freight forwarder or customs broker. If you only sell services, you generally won’t need one.
For most freelancers and small businesses the order is simple: quote, then proforma if the client needs one, then the final invoice. Exporters of goods add a commercial invoice for the shipment. When a deposit was paid against a proforma, the final invoice should show the full amount and then deduct what’s already been received.
1. Quote Q-2026-014: 500 units at {price}, valid 30 days
2. Proforma PF-2026-009: same items, 50% advance requested
3. Commercial invoice: goods, HS codes, origin and weights for customs
4. Invoice INV-2026-112: full total, less advance paid, balance due {date}Open the proforma invoice template in BillFlow and the document is titled “Proforma Invoice” for you. Add your items, tax and an advance amount in the notes, such as “50% advance requested; this is not a tax invoice”. When the sale is confirmed, start a regular invoice from the generator with a fresh invoice number, and add your tax ID and your client’s, along with your bank or payment-link details, so it’s ready to pay.
Yes. Clients often pay a deposit or the full amount against a proforma. Once paid, issue a proper invoice or tax invoice for your records and theirs, referencing the proforma number.
You can show the tax that will apply so the buyer knows the full cost, but the proforma itself usually isn’t a tax document. The tax is accounted for on the final invoice. Confirm the timing rules with your accountant.
Generally it’s treated as a good-faith statement of the expected sale rather than a binding demand. Your contract, purchase order or accepted quote is what usually sets the binding terms.
Sometimes the same document serves both purposes, but many exporters issue a separate sales invoice for their books. Ask your accountant and freight forwarder what works for your setup.
Yes. A separate prefix such as PF keeps your real invoice sequence unbroken, which accountants and tax authorities expect.