What a proforma invoice is — and when to use one instead of a quote
A proforma invoice is a preliminary invoice sent before the sale is final. It looks like a real invoice — itemised, with VAT and a total — but it is not a demand for payment against a completed sale, and it is not a tax invoice. Its job is to tell the buyer exactly what they will be charged so they can arrange payment, approve a budget, or open a letter of credit.
Kenyan businesses reach for a proforma in specific situations: when a customer needs a formal document to release payment or get internal approval; when goods are being imported and the buyer needs it for customs or to arrange forex; and when you want a deposit before starting work. It is more formal than a quotation and closer to the final invoice — but it commits neither side to the tax position.
Crucially, a buyer cannot claim VAT or an expense on a proforma invoice. Once payment is made or the goods are delivered, you issue the real tax invoice — through KRA’s eTIMS where applicable — and that is the document that carries the tax.
What a proper proforma invoice includes
- ◆Your business name, contacts and KRA PIN, clearly marked “Pro forma”
- ◆A proforma number and date, plus a validity or payment-due date
- ◆The customer’s name and address
- ◆Itemised goods/services with quantity, unit price and amount
- ◆Subtotal, VAT (16% if you are VAT-registered) and the total payable
- ◆Payment details (M-Pesa, bank) and — for imports — currency and delivery terms
Common mistakes to avoid
- ✕Not labelling it “Pro forma,” so it gets mistaken for a tax invoice
- ✕Treating it as the final invoice — the real tax invoice must still follow via eTIMS
- ✕Leaving out validity or payment-due date when the buyer needs it to release funds
- ✕Different figures on the proforma and the final invoice, which stalls payment
Questions
What’s the difference between a proforma invoice and a real invoice?
A proforma is issued before the sale is complete, to arrange payment; it carries no tax effect. A tax invoice is issued once the sale is done and is what the buyer uses to claim VAT or the expense. In Kenya the tax invoice goes through eTIMS; the proforma does not.
Proforma invoice vs quotation — which do I send?
A quotation is to win the work — an offer at a price. A proforma is usually sent after the customer has decided, in invoice format, so they can pay or get approval. If the buyer says “send me something to process payment,” send a proforma.
Can a buyer claim VAT on a proforma invoice?
No. VAT and expenses can only be claimed on a proper tax invoice. The proforma states the expected charge; the tax invoice follows and carries the tax.
Is a proforma invoice legally binding?
By itself it commits neither side to the sale — it is a statement of intended terms. It becomes real when the buyer pays or the goods are delivered and the tax invoice is raised.
When should I use a proforma for imports?
When a Kenyan buyer needs to arrange forex, open a letter of credit, or clear customs, they will often ask for a proforma showing the goods, values and currency — a formal figure to act on before the final invoice exists.
The proforma invoice generator is free to build and preview. Downloading a clean PDF without the small watermark is KES 100 in Kenya — a one-off, valid for a few hours so you can make several — and free everywhere else. No account needed; your business details are saved on your own device.