Proforma vs final invoice: differences your AP team needs to be clear on

Proforma invoices land in the AP inbox more often than it seems. Some suppliers use them as advance payment requests. Others issue them as formal quotations before the PO is confirmed. In both cases, the proforma looks like a real invoice: it carries amounts, VAT and supplier data.

An AP team without a clearly defined process can approve and pay it as if it were the final invoice. Or book it and try to deduct VAT. Both are problematic situations.

Key differences

Aspect	Proforma invoice	Final invoice
Nature	Pre-transaction commercial document	Mandatory tax document (RD 1619/2012)
Tax effects	None	Accrues VAT, creates right to deduct
Payment obligation	Does not create legal obligation	Creates a legal payment obligation
Serial number	May or may not have its own number	Sequential numbering mandatory (art. 6 RD 1619/2012)
Booking	Not booked	Booked in the accrual period
Deductible VAT	No deductible VAT	Deductible VAT in the accrual period
Identification	Must state "PROFORMA" or "PROFORMA INVOICE"	States "INVOICE" or invoice numbering

This information is general guidance. Consult your tax adviser.

When and why a proforma arrives

Proformas appear in five common situations:

1. Advance payment. The supplier requests a partial payment before executing the service or manufacturing the product. Issues a proforma so the client can process the transfer internally.
2. Formal quotation. The supplier formalises an offer with price breakdown before the client confirms the order. It looks like an invoice but there is no transaction yet.
3. Imports and customs. In international imports, the proforma is used for customs procedures before the final invoice is issued.
4. Booking a slot or service. Hotels, training courses, events. The supplier issues a proforma so the client can process internal approval and execute payment.
5. Binding quote. In some sectors, the proforma works as an accepted quote and serves as the basis for the PO.

When each is booked

The proforma is not booked. It has no official invoice number from the issuer (it may have an internal reference number), does not accrue VAT and does not evidence that the transaction has taken place. If there is an advance payment based on a proforma, that payment is recorded as a supplier advance, not as an expense.

The final invoice is booked in the accrual period, which is when the transaction occurs (delivery of the good or rendering of the service), according to RD 1619/2012 and the VAT Law. If the final invoice is issued after the transaction (the usual case), the accrual date is the transaction date, not the issue date.

Correct flow when there is an advance payment with a proforma:

1. Proforma received → recorded as supplier advance (treasury account, not expense).
2. Transaction takes place → supplier issues the final invoice.
3. Final invoice received → expense booked in the accrual period.
4. Advance reconciled against the final invoice → advance account cleared.

This information is general guidance. Consult your tax adviser.

Typical AP errors

Error 1: booking the proforma as an expense. If you record the proforma in the received invoices ledger, you will try to deduct VAT that has not yet accrued. The final invoice, when it arrives, will look like a duplicate. The AP team will have to undo the proforma entry before recording the final invoice.

Error 2: paying the final invoice as if it were new after having paid the proforma. If the AP team does not link the proforma advance to the final invoice, it can pay the full amount of the final invoice in addition to the advance already paid. The supplier would collect twice or, at the very least, a refund of the excess would have to be requested.

Error 3: running three-way matching on a proforma. The proforma has no official PO number or cross-references to a delivery note because the transaction has not yet taken place. Trying to match on it is matching on an intent document, not on facts.

Error 4: filing the proforma as if it were the final invoice. The received-invoices VAT ledger must contain final invoices, not proformas. If during an audit the inspector reviews the ledger and finds proformas filed as invoices, it is a documentary process deficiency.

How to identify a proforma when it arrives

Four indicators that distinguish a proforma from a final invoice:

• The document explicitly says "PROFORMA INVOICE" or "PROFORMA". Legally, the proforma must identify itself as such. If a document is called "INVOICE" and has sequential numbering, it is a final invoice.
• No invoice number in the issuer's official series. It may have an internal reference number (PF-2026-0034), but not a tax-series invoice number.
• No associated delivery note. If the good has not been delivered or the service has not been rendered, there can be no delivery note. The absence of a delivery note signals that the transaction has not yet occurred.
• The supplier states that the final invoice will be issued later. Some suppliers state this explicitly in the body of the document.

Impact on three-way matching

Three-way matching cross-checks three documents: purchase order, delivery note and invoice. A proforma cannot enter this cross-check because:

• There is no associated delivery note (delivery has not occurred).
• There is no established payment obligation (it is not yet a debt).
• Amounts can change between the proforma and the final invoice.

The proforma can be used as a reference to create or validate the PO. If the proforma specifies prices and conditions, the purchasing team can create the PO on that basis. When the final invoice arrives, matching is done against the PO, not against the proforma.

Case: training vendor that always issues a proforma first

A professional services company regularly receives proformas from its training vendor before each course. The vendor issues the proforma so the training manager can request expense approval, then payment, and finally issues the final invoice after delivering the course.

The problem: the AP team had no separate process. Proformas entered the normal flow, were approved as invoices and booked. When final invoices arrived, they looked like duplicates. The AP team blocked them and detecting the error took time.

The fix was simple: separate the proforma flow. When a proforma arrives, it is filed for reference without being booked. A PO is generated with the proforma data. The advance payment is recorded as an advance. When the final invoice arrives, matching is done against the PO and the advance is reconciled.

Frequently asked questions

Can I deduct VAT from a proforma invoice?

No. The proforma does not accrue VAT because it does not evidence the transaction. You can only deduct VAT from final invoices that meet the requirements of RD 1619/2012. [Consult your tax adviser]

Is a paid proforma a deductible expense for personal income tax or corporate tax?

Paying a proforma creates an advance, not an expense. The expense is recognised when the final invoice is received and the transaction is evidenced. [Consult your tax adviser]

What if the supplier does not issue the final invoice after collecting on the proforma?

They are obliged to issue it. The proforma does not replace the final invoice. If the supplier does not issue it, you have the right to claim it. Without a final invoice you cannot justify the expense or deduct VAT. [Consult your tax adviser]

Does the proforma have any legal validity?

It has no tax validity as an invoice. It can have contractual validity as an accepted offer if the contract terms set this out, but this depends on the agreement with the supplier, not on tax law.

How do I handle a proforma in the AP system?

Do not push it into the invoice approval flow. File it as a PO reference. If there is an advance payment, record it as a supplier advance. Wait for the final invoice to book the expense.

Is an accepted quote the same as a proforma?

Functionally yes: both are pre-transaction documents with no tax effects. Some suppliers call "proforma" what others call "accepted quote". The AP treatment is the same: do not book until the final invoice arrives.

The simple rule for AP

1. If the document says "PROFORMA" or has no official invoice numbering: do not book, do not deduct VAT, record as advance if payment is made.
2. If the document says "INVOICE" and has the issuer's sequential number: it is the final invoice. Book in the accrual period and run three-way matching.
3. When the final invoice arrives after a paid proforma: reconcile the advance before paying the difference.

This information is general guidance. Consult your tax adviser.

Related content

• Three-way matching: cross-checking invoice, PO and delivery note line by line
• Touchless accounts payable: what it means and how to measure it
• Invoice without PO: how to handle routing in AP