Proforma Invoice South Africa
Understand when to use a proforma invoice, how it differs from a quote or tax invoice, and how to create one in seconds.
Not a tax invoice
A proforma invoice looks like an invoice but is not a demand for payment. Your client cannot use it to claim input VAT. Only a final tax invoice issued under Section 20 of the VAT Act allows that.
What is a proforma invoice?
A proforma invoice is a preliminary document that shows the buyer what the final invoice will look like. It includes the same details (items, quantities, prices, VAT) but it is clearly marked as a proforma, meaning it is not yet a request for payment.
The word “proforma” comes from Latin, meaning “for the sake of form”. It is a document that follows the form of an invoice without being one.
Proforma invoice vs quote vs tax invoice
Quote / Quotation
A price offer for specific goods or services. When accepted, it forms a binding contract. Most common in South African business. Does not need to look like an invoice.
Proforma Invoice
Formatted exactly like an invoice but marked “Proforma”. Used when the buyer needs a document for customs, banking (e.g., foreign exchange), internal approvals, or budgeting. Not a demand for payment. Cannot be used to claim input VAT.
Tax Invoice
A formal demand for payment required by Section 20 of the VAT Act 89 of 1991. Must include specific fields (VAT number, amounts excl. and incl. VAT). The buyer uses this to claim input VAT from SARS. Issued after the supply is made.
When to use a proforma invoice
- International trade: customs authorities require a proforma to assess duties before goods are shipped
- Foreign exchange: South African banks may require a proforma invoice before approving an international payment
- Government and corporate procurement: many departments need a proforma for budget approval before issuing a purchase order
- Pre-payment: when you want to show the client exactly what they'll pay before starting work
- Import/export: to declare the value of goods for customs purposes
What to include on a proforma invoice
- The words 'Proforma Invoice' clearly displayed
- Your business name, address, and contact details
- The buyer's name and address
- A proforma number (use a different sequence from your invoice numbers)
- Date and validity period
- Detailed description of goods or services
- Quantities, unit prices, and line totals
- VAT breakdown (if VAT registered)
- Total amount
- Payment terms and banking details
- Shipping/delivery terms (for goods)
Example proforma invoice (quote)
A wabill quote serves as a proforma invoice for most use cases.
How wabill handles proforma invoices
wabill does not have a separate proforma invoice document type. In practice, a quote covers 90% of proforma use cases. A wabill quote includes your business details, a full breakdown, VAT breakdown, validity period, and terms. The same information a proforma requires.
If your client specifically needs the words “PROFORMA INVOICE” on the header (common in formal procurement or import workflows), that is a feature we plan to add. For now, most clients accept a professional quote PDF for the same purpose.
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FAQ
What is a proforma invoice?
A proforma invoice is a preliminary bill or estimate sent before work is completed or goods are delivered. It shows your client what the final invoice will look like, including descriptions, quantities, amounts, and VAT, but it is not a demand for payment.
Is a proforma invoice the same as a quote?
They serve a similar purpose but have different uses. A quote is a price offer for a specific job. A proforma invoice is formatted like a final invoice and is often required for customs, banking, or internal approvals. In everyday South African business, they are often used interchangeably.
Can I convert a proforma to a final invoice?
Once the client approves and the work is complete, create a new invoice in wabill. Reference the quote number in your notes so there's a clear paper trail from quote to final invoice.
Is a proforma invoice legally binding?
Not by itself. A proforma invoice is an offer, not a contract. However, if the client accepts it and you both act on it (e.g., deposit is paid, work begins), it can form part of a binding agreement under South African contract law.
Does a proforma invoice need a VAT number?
If you are VAT registered, yes. Include your VAT number and a VAT breakdown. However, a proforma invoice is not a tax invoice under Section 20 of the VAT Act 89 of 1991. The client cannot use it to claim input VAT. Only a final tax invoice allows that.
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