2 min read
Definition
A pro-forma invoice is a preliminary bill sent before goods or services are supplied, typically to request payment in advance. It is not a demand for payment of a debt but a quotation-style document confirming price and terms, often used to get paid up front.
In plain terms
For a new or higher-risk customer, issuing a pro-forma and requiring payment before delivery removes the credit risk entirely — you are paid before you supply. It converts a potential debtor into cash in advance.
Why it matters
Pro-forma invoicing is a simple way to eliminate the cash gap on risky or one-off sales. See deposit and how to take deposits.
Related reading
Deposit
A deposit is a payment taken before work begins, funding the initial outlay and confirming the customer's…
Read →
Credit note
A credit note reverses all or part of an invoice — the accounting opposite of a sales invoice, used for…
Read →
Stage payment
A stage payment is a payment made at a defined point in a project, rather than all at the end — for example…
Read →
Confidential invoice discounting
Confidential invoice discounting is invoice discounting arranged so the business's customers are unaware a…
Read →Funding for UK limited companies
Credicorp lends to your company, not to you personally — short-term working capital with no personal guarantee. See what your business could access.