Proforma and commercial invoices look almost identical, but they do different jobs. Send the wrong one at the wrong time and you can confuse a client, delay a deposit, or muddle your bookkeeping. This guide breaks down what each document is, when to send it, and what to put on it — written for freelancers, not import/export specialists.
Quick note: This is general information, not tax, legal, or accounting advice. Rules for recording income, late fees, and customs vary by accounting method, state, and country. When in doubt, check with a licensed accountant.
What Is a Proforma Invoice?
A proforma invoice is a preliminary bill or estimated quote you send to a client before any work begins or goods are delivered. It outlines the scope of work, the estimated costs, and the terms — a formal, itemized commitment to a price, more binding than a casual email but not yet a true bill.
Despite the name, a proforma invoice does not create revenue in your books on its own. Under U.S. tax rules, when you record income depends on your accounting method: cash-method filers report income in the year they receive it, while accrual-method filers report it in the year they earn it (IRS Publication 538, Accounting Periods and Methods). A proforma triggers neither — no work earned, no money received.
What to Put on a Proforma Invoice
A useful proforma reads like a contract summary. Include the label "Proforma Invoice" at the top, a reference number kept separate from your real invoice sequence, an itemized scope of work with estimated prices, the deposit you are requesting, an expiry date ("valid for 30 days"), and a clear note that the figures are estimates.
Why Freelancers Use Proforma Invoices
For freelancers, a proforma invoice is an excellent tool for setting expectations and securing deposits. Instead of starting work off a vague email thread, you send a clear document laying out the milestones and the deposit you need up front — then convert it to a commercial invoice once work is underway. (See the deposit example below.)
What Is a Commercial Invoice?
A commercial invoice (often just called an "invoice") is the real deal: a formal document issued after services are rendered or goods are delivered, serving as the official request for payment for that completed work.
Once sent, it becomes an account receivable — money owed for work already earned — and the permanent record of the transaction. The IRS lists invoices among the supporting documents a business should keep to show "the amounts and sources of your gross receipts," kept as long as needed to prove income or deductions on a return (IRS, What kind of records should I keep). If you are ever audited, the commercial invoice is what backs up the income line.
What to Put on a Commercial Invoice
It needs more than a proforma because it is the document of record:
- The word "Invoice" plus a unique, sequential invoice number
- Your business and tax details, and the client's billing details
- The invoice date and the payment due date (a specific date beats "due on receipt")
- A line-item breakdown of the actual work delivered, with final amounts
- Any deposit already paid, subtracted to show the balance owed
- Accepted payment methods and your late-fee policy, if you charge one
The Most Common Denominator
When freelancers talk about "sending an invoice," they almost always mean a commercial invoice — the document you generate at the end of a project (or milestone) to get paid for work you just finished.
Proforma vs. Commercial Invoice: Key Differences
Understanding which document to use when will save you headaches at tax time:
| Feature | Proforma Invoice | Commercial Invoice |
|---|---|---|
| When to send it | Before the work begins | After the work is done |
| Primary purpose | Offer an estimate / Secure a deposit | Request final payment |
| Status | Preliminary (can be negotiated) | The document of record |
| Accounting impact | No revenue entry on its own | Recorded as accounts receivable |
| Tax recordkeeping | Not the source document for income | The supporting record for gross receipts |
When Should Freelancers Use a Proforma Invoice?
If a proforma invoice isn't a "real" invoice, why bother using one at all? Here are three scenarios where freelancers benefit hugely from proforma invoices:
1. Requesting Upfront Deposits
Never start a large project without a deposit. A detailed proforma looks far more professional than a "please pay me 25% now" email and makes it easy for the client's accounting department to process the transfer. Here is the workflow in practice — a client hires you for a $5,000 website redesign:
- You send a proforma invoice for $5,000, itemizing each milestone, noting "50% deposit ($2,500) due to begin work."
- The client approves and pays the $2,500 deposit.
- You record that $2,500 as income for the period it lands (cash-method timing) and do the work.
- At delivery, you issue a commercial invoice for $5,000, show the $2,500 paid, and bill the $2,500 balance.
The proforma sets the expectation; the commercial invoice is what your books rely on.
2. Formalizing Complex Proposals
If your work involves variable costs (server usage, stock photos, ad spend), the final figure may shift. A proforma acts as a "good faith estimate" that shows the client what to expect while leaving you room to adjust the final commercial invoice if scope creeps.
3. International Clients & Customs
If you ship physical goods across borders, the paperwork is governed by customs law, not your preference. For goods imported into the U.S., federal regulations require a commercial invoice for each shipment at the time the entry summary is filed (19 CFR § 141.81), prepared "in the manner customary in the trade" (19 CFR § 141.83). A proforma invoice following the prescribed format (19 CFR § 141.85) may be accepted only when a commercial invoice genuinely cannot be produced — and it is not a routine substitute. Under 19 CFR § 141.91, the importer generally must show the missing invoice resulted from circumstances beyond their control, file a written declaration, and post a customs bond, with the actual commercial invoice still due afterward (within 120 days). Confirm exact requirements with your carrier or a customs broker, since rules differ by country.
Can You Pay a Proforma Invoice?
Yes — clients can and do pay against a proforma invoice, which is exactly how you secure your upfront deposit.
The distinction is between the payment and the paperwork. Receiving money is a real event: on the cash method, that deposit counts as income in the period you receive it, regardless of which document prompted it (IRS Publication 538). But the proforma is not the record you keep for that income. Once the project wraps, issue a commercial invoice reflecting the actual work and amounts so your books and supporting documents line up.
Common Mistakes to Avoid
- Forgetting to issue the final invoice: If a client pays your entire fee upfront based on a proforma invoice, you still must send them a commercial invoice marked "Paid in Full" for both of your tax records.
- Confusing your accountant: Don't mix your proforma invoices with your real invoices in your accounting software. Keep them separate. Proforma invoices shouldn't have sequential invoice numbers that overlap with your real ones.
- Not having clear payment terms: Even on a proforma invoice, clearly state that this is an estimate and outline your terms. Read our guide to Net 15 vs Net 30 payment terms to get this right.
Quick Answers
Is a proforma invoice legally binding? It is more formal than a verbal quote, but it is not the final demand for payment. The commercial invoice is the document of record once work is delivered.
Can I just send one invoice instead of two? For most small domestic jobs without a deposit, yes — skip the proforma and send a commercial invoice when the work is done. Use a proforma when you need a deposit, when costs may shift, or when a client's purchasing department requires a formal quote first.
Which one do I keep for taxes? The commercial invoice. The IRS counts invoices among the supporting documents for your gross receipts, so keep them filed and organized (IRS recordkeeping guidance).
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