Proforma Invoice

🔍 What is a Proforma Invoice?

A Proforma Invoice is a preliminary version of the final invoice that you can share with a client before officially generating the real invoice. It works like a quotation or draft bill — useful to confirm scope, price, and tax with the client before any money or accounting impact is recorded.

Key things to know about a Proforma Invoice:

• It does not create any tax liability.
• It is not part of accounting calculations (revenue, GST, outstanding) until it is finalized into a real Invoice.
• It carries a Draft status until you finalize it.
• The company details (name, address, GSTIN, state, logo) are saved with the proforma at the moment of creation, so the printed copy stays accurate even if you later edit your company profile.

🎯 Purpose of Proforma Invoice (With Real-World Example)

Proforma Invoices serve these main purposes:

• Quotation / Estimate: Send a priced proposal to the client for sign-off before doing the work.
• Pre-Billing Confirmation: Lock down line items, taxes, and totals with the client without yet committing to a tax invoice.
• Audit Trail of Negotiation: Keep a record of what was offered, when it was sent, and what the client agreed to.

✅ Real-World Scenario

A client asks for a proposal for a 3-month maintenance package. You prepare a Proforma Invoice listing:

• Maintenance retainer charges
• Hosting fees
• Applicable GST

You email or WhatsApp the proforma to the client. Once the client confirms the scope and pricing, you click Finalized on the proforma — the system instantly creates a real Invoice with a fresh, unique Invoice Number, copies all line items, taxes, and attached documents, and from that moment the amount enters revenue, GST, and outstanding reports.

🧾 How to Create a Proforma Invoice

📍 Screen: Billing → Proforma Invoice → click Add (top-right). The Add Proforma Invoice aside opens on the right — that aside is the screen where you fill in the fields below.

🔀 Choose Invoice Type

At the very top of the form you will see an Invoice Type toggle with two options:

• Client Invoice — bill a client directly without linking to any project. Use this for ad-hoc proposals, one-off services, or when you simply do not track work as projects. You only have to pick the Client.
• Project Invoice — bill against a specific project. The system auto-fills client information from the chosen project. Use this when you want the proforma to roll up into the project’s profitability and statement after it is finalized.

You can switch the toggle freely until you save. Pricing, tax, and GST flow are identical in both modes — only the project linkage differs.

🔹 Header Fields

💡 Currency lives on the Client, not the Project. The proforma’s billing currency is inherited from the linked Client. If you switch the client, the currency switches with them.

🔁 Recurrence (optional, only on new proformas)

If the same proforma needs to be raised on a schedule (monthly retainers, weekly subscriptions, etc.), you can convert this proforma into a recurring template at creation time.

Once saved as recurring, the system handles generation automatically. See the Recurring Invoice Guide for the full life-cycle of a recurring template.

📦 Billing Items

Use Add Billing Item to insert line items that you want to bill.

➡️ You can add multiple items or remove any row as needed.

📍 GST behaviour (CGST + SGST vs IGST)

• If the client’s state matches your company’s state (intra-state sale) → only CGST and SGST are editable; IGST is locked.
• If they are different states (inter-state sale) → only IGST is editable; CGST and SGST are locked.
• The state comparison happens automatically the moment you pick the Client (or Project’s client). Make sure your client’s State is correctly set on their profile, and your company’s State is set under Settings → Primary Settings → Company Details.

📊 Summary Section

📎 Other Fields

📂 Tabs Inside a Proforma Invoice

📍 Screen: Open any proforma from Billing → Proforma Invoice. Across the top of the aside panel you will see four tabs — each tab is a separate screen within the same proforma, click a tab to switch the view.

• Details — the form / view of the proforma fields.
• Attachments — files uploaded against this proforma.
• Logs — change history of every edit made to this proforma.
• Invoice View — the printable, branded layout exactly as the client will see it.

⚙️ Action Buttons in Proforma View

📍 Screen: The Finalized, Share, Send Email, and Print buttons appear at the top-right of the aside header — visible only when you are on the Details or Invoice View tab.

🔄 Finalize → Invoice (Convert Flow)

Finalizing is the moment a Proforma turns into a binding, accounting-impacting Invoice. It is a single click, but quite a lot happens behind the scenes:

• A brand-new Invoice record is created with its own unique Invoice Number (separate from the proforma’s number).
• All billing items, quantities, price per unit, and CGST / SGST / IGST values are copied over exactly as entered on the proforma.
• Any attached documents are carried into the new Invoice.
• The Client (and Project, if it was a Project Invoice) is linked.
• The company details (name, address, GSTIN, state, logo) are snapshot onto the new Invoice at this moment.
• The Proforma’s status flips to Finalized and a Converted chip is added in the header.
• The Finalized button is replaced by a View Invoice button that jumps you to the freshly created Invoice.

📌 What happens after finalization

• The Invoice from this point forward is the source of truth for revenue, GST, and outstanding — the proforma stays as a historical record only.
• If the converted Invoice’s amount is greater than the linked project’s Estimated Cost, the system shows a confirmation alert before creating the Invoice.
• For more on what an Invoice does once it exists (payment status, credit notes, cancellation), see the Invoice Guide.

💰 Status Chip

Each proforma carries a Status chip in the header that reflects exactly one of two states:

• Draft — the proforma has been created but not yet converted. It can be edited, deleted, shared, emailed, or printed.
• Finalized — the proforma has been converted into a real Invoice. Editing and deletion are locked from this point on; use the View Invoice button to navigate to the resulting Invoice for any further action.

🔁 Automatic Email Notification

When the system Send Email action is triggered (manually or as part of the workflow), the proforma is emailed as a branded PDF to the client and the assigned owner using DaaiSuite’s email templates.

📌 Key Points

• No Tax Liability: A Proforma Invoice does not affect GST returns, revenue reports, or the client’s outstanding balance — those impacts begin only when you click Finalized.
• One-Way Conversion: Once finalized, a proforma cannot be reverted back to Draft. Any further changes happen on the resulting Invoice.
• Unique Numbers: The proforma carries its own number; the Invoice that comes out of finalization gets a fresh, separate Invoice Number.
• GST Entry: GST is entered as a percentage; the rupee amount is calculated for you. CGST + SGST applies for same-state clients; IGST applies for inter-state clients.
• Currency Belongs to the Client: The billing currency is taken from the linked client (not the project). If the currency differs from your company’s primary currency, the Today’s Currency Rate field appears and is frozen onto the proforma.
• Snapshot Company Details: The branded PDF preserves the company name, address, GSTIN, state, and logo as they were on the day the proforma was created.
• Project Invoices Without a Project: Pick the Client Invoice mode from the Invoice Type toggle if you do not want to attach the proforma to a project.

💡 Tips

• Use a Proforma Invoice as a quotation — share it for client approval, then click Finalized to issue the real Invoice without retyping anything.
• Always check Invoice Date and Due Date before finalizing — the resulting Invoice inherits these dates.
• Use Catalog items with HSN, Price, and Tax pre-set to speed up billing and reduce typos.
• Keep your client’s State on file so the CGST + SGST vs IGST split happens automatically.
• Attach scope sheets or contracts on the proforma so they automatically carry into the Invoice on finalization.
• For the schedule-based version, see the Recurring Invoice Guide.
• For the Invoice that is created from finalization, see the Invoice Guide.