In the corporate world pro forma invoice is not considered to be a true invoice. The pro forma invoice is a simple document that indicates the seller had a commitment with the buyer in regards to providing him or her with certain goods for a previously specified price. It is impossible for the seller to mention the pro forma invoice as an accounts receivable. Likewise, it is unwise for the buyer to think of the pro forma invoice as an account payable. Pro forma invoice is generated as a way of promising the client about delivering certain goods and services in advance of actually providing them in reality.
Generally, a person uses the pro forma invoices to declare the worth of their products and goods for the customs. The pro forma invoices should not be indicated as the VAT invoices; therefore, it is necessary that you should mention that in your pro forma invoice. It is important to send out the true invoice once the buyer has received the goods and the products mentioned in the pro forma invoice. You must keep in mind that the pro forma invoice does not replace the commercial invoice but it is quite similar to it. Sometimes the pro forma invoice is also known as the preliminary invoice.