document that states a commitment from the seller to provide specified
goods to the buyer at specific prices. It is often used to declare
value for customs. It is not a true invoice, because the seller does
not record a pro forma invoice as an accounts receivable and the buyer
does not record a pro forma invoice as an accounts payable. A pro
forma invoice is not issued by the seller until the seller and buyer
have agreed to the terms of the order. In few cases, pro forma invoice
is issued for obtaining advance payments from buyer, either for start
of production or for security of the goods produced.
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