Proforma Invoice Format in Excel

Suppliers frequently use a proforma invoice format in Excel nowadays as Excel is an easily accessible tool. It helps prepare preliminary bills (proforma invoices) without hassle and keeps records of transactions. If you are a supplier, learn in detail about this type of invoice in this blog to facilitate seamless supply to your customers.

What is a Proforma Invoice Template?

Businesses or individuals send a preliminary invoice to their clients, highlighting the cost of goods and services before they are delivered and payment is due. This type of invoice is termed a proforma invoice template under GST.

A proforma invoice additionally contains essential details such as applicable taxes, commissions, and shipping details like the weight of the shipment, shipping method, and shipping costs. Thus, suppliers or retailers often issue a proforma invoice to an enquiring buyer or customer.

How Does a Proforma Invoice Template Work?

Suppliers provide a proforma invoice as an official document of goods and services the buyers aim to purchase. The sending party enters the details of the proforma invoice template including details of a forthcoming transaction.

This information includes the contact details of the suppliers and their clients, goods and services rendered, cost of items, taxes, deposits, terms, due date, invoice number, discounts and other important details.

How to Create a Proforma Invoice Template?

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A supplier can create a proforma invoice template in the following ways:

1. From Scratch:

You can create a proforma invoice manually using word processors and spreadsheet programs. Using Microsoft Word or Google Sheets is the common way to create a proforma invoice manually.

While creating a manual proforma invoice can be cost-effective, it can be time-consuming as well. Further, you need to calculate the invoice amount manually which results in possibilities for errors.

However, here are the things you need to include in the proforma invoice:

• Sender’s business details like name, company name, address and phone number
• Customer details including name, address and contact number
• Invoice number
• Date of sending the invoice
• Due date
• Reference number, if applicable
• Item descriptions and names
• Cost of the items or sale price
• Quantity of each item
• Line total with taxes after deducting discounts
• Subtotal of all the items
• Applicable taxes
• Discounts, if applicable
• Deposits if any
• Payments
• Due amount
• Terms of sale
• Notes

Once you complete creating the proforma, save it and send it to the client.

2. Using a Template:

A proforma invoice template is a premade template that contains the necessary details that you need to enter to prepare the invoice for your clients. It contains all the essential invoice elements mentioned above. You have to fill in the particulars as applicable to complete the invoice.

A proforma invoice template is cost-effective and less time-consuming compared to a manual proforma invoice. You can fill in the particulars, save and send it to clients.

3. Using a Proforma Invoice Generator:

An invoice generator helps suppliers create invoices and perform automatic calculations once the necessary details are entered. It includes all the necessary fields that a manual invoice needs to incorporate. As a result, you can prepare it and send it to your clients seamlessly.

An invoice generator reduces the time consumed in creating a proforma invoice. However, it can be cost-intensive considering the subscription cost for availing the features of invoice generators. You can use any of the invoice generators available in the market if you plan to save time in proforma invoice generation.

Download Professional Proforma Invoice Format in Excel India Within Minutes

You can download simple proforma invoice templates from various portals. Here are the steps to download a professional proforma invoice format in Excel:

Step 1: Visit any of the official websites where you can download a proforma invoice.

Step 2: Select the proforma invoice that you want to download.

Step 3: Click on the ‘Download’ option.

Step 4: You will find a downloaded proforma invoice in Excel format in your system.

Benefits of Using a Proforma Invoice Format in Excel

The following are the benefits of using a proforma invoice format in Excel:

• Service Clarity:

A proforma invoice helps present the scope of services that you render to your customers. This helps customers understand the services they receive and the inclusions in each service.

• Cost Estimating:

A proforma invoice contains the estimated prices of goods and services that customers want to purchase. As a result, with adequate knowledge, customers can plan their budgets and expenditures.

• Stock Management:

Invoices highlight the inventory levels of goods, which further helps you manage stocks. You can consider pre-ordering goods that are likely to run low, preventing interruptions in supply. Thus, these invoices act as a complete supply chain solution.

• Communication of Payment Terms:

A proforma invoice highlights the payment terms mentioning the payment due dates and accepted payment methods. Customers can acquire knowledge of payment terms before completing a transaction.

• Professional Appearance:

Proforma invoices created in Excel format are well-organised and mention the necessary details for customers' and suppliers' reference. Hence, it increases the credibility of businesses with a professional appearance.

• Template Reusability:

Using a proforma template helps you reuse it multiple times. You can use the same template to fill in customer particulars, thereby reducing the time consumed to prepare such an invoice. Additionally, it helps you maintain consistency across all invoices sent to different clients.

• Historical Record Keeping:

You can use a proforma invoice in Excel format as a record for future reference. It helps you track past transactions and sales history to make future business decisions.

• Data Analysis:

As a supplier, you can use the Excel data to analyse invoice details such as customers' purchasing patterns, seasonal demands and popular product details. Using this information you can devise effective business strategies for operation.

• Integration with Other Tools:

You can easily extract data from Excel files and integrate the same into other business management software or tools. This enables you to improve business management and other business processes.

• Global Access:

You can access and edit Excel files from any place. As a result, you can seamlessly manage your invoices for clients across different time zones.

Importance of Proforma Invoice in Business Transactions

Here is why a proforma invoice is important for business transactions:

• It acts as a preliminary document that highlights the transaction details prior to final sale confirmation. As a result, it clarifies the expectations of both the buyer and seller wherein the products or services, their quantities, prices and total costs are specifically mentioned.
• This type of invoice facilitates advance payment and deposits. Thus, it reduces the financial risk for sellers while improving their cash flow.
• Businesses need to maintain a formal and structured invoice format. The use of a proforma invoice helps businesses increase their credibility and trust among customers while rendering a professional approach.
• Using proforma invoices helps in regulatory compliance as they enable suppliers to maintain records of intended transactions. It additionally helps in financial reporting, internal, planning and budgeting, facilitating revenue forecast and effective inventory management.
• This type of invoice helps businesses ensure transparency with clients, improving the supplier-customer relationship.

Differences Between Proforma Invoices and Regular Invoices

Proforma invoices and regular invoices differ significantly as follows:

Proforma Invoice	Regular Invoice or Commercial Invoice
This is a preliminary bill of sale that suppliers send to buyers before delivery of goods and services highlighting estimated costs. However, it is not a payment request.	This is an official invoice sent by suppliers to customers. In other words, this is the final formal document that outlines the transaction details and specifies expected payments. It is an official request for payment issued after delivering goods and services.
It is not a legally binding document to demand payment for actual sales. It is not an actual invoice, rather it is a draft invoice.	It is a legally binding document to enforce payments. It acts as proof of transactions, financial records and accounting.
This type of invoice is used for customs purposes, obtaining financing or as a sales quote for potential buyers.	This type of invoice is used after the completion of transactions to collect payment from buyers. Both the parties can refer to this document as an accounting record.
It incorporates product description or service description, quantities and prices. However, they do not contain the payment due date.	It incorporates the final amount payable, terms of payment and details of transactions followed by payment instructions.

Why Use Excel Format for a Proforma Invoice?

Here are the reasons why you need to use Excel format for a proforma invoice:

1. Seamless Design

Excel offers a seamless format for invoice creation that helps avoid calculation errors. Its automated formulae enable users to calculate total invoice amounts to create a well-designed invoice. Small and medium businesses can create invoices without any hassle using Excel.

2. Complete Invoicing Layout

Excel formats provide a standard layout to detail the transactions. It further does not necessitate formatting, thereby saving time for users in the invoice preparation process.

3. Boosting Invoice Speed

Creating such an invoice manually is time-consuming and requires effort. However, using an Excel format boosts the speed of invoice preparation, allowing suppliers to speed up sales processes with automation.

4. Fully Customisable Proforma Invoice Format

You can customise Excel format for proforma invoices to showcase your professionalism. It allows you to add a logo and colour and choose font styling that represents the identity of your brand. In addition, you can edit the fields of the invoice based to meet the business requirements.

5. Send Invoices Online

The Excel format of such invoices allows you to send these invoices online to your customers in minimal time. Moreover, you can take print of these invoices to send to your customers or store them as records for future reference.

6. Free Formats

Certain portals allow you to create proforma invoices free of cost using templates. You can create unlimited invoices of this type with trial packs provided on the portals and send them to clients without incurring additional costs.

7. Flexibility

You can use Excel to customise the layout, design and format of your invoices. In other words, you can use it whenever it is convenient and send it to your customers.

8. Ease of Use

As Excel is one of the popular Microsoft tools, suppliers are often acquainted with its functions. Thus, they are not required to install or learn the functions of other software to create invoices.

9. Calculations

Excel automates calculations with multiple formulae available in the software. This reduces errors in calculations of total bill amounts, taxes and discounts while saving you time.

10. Portability

Excel files are portable, making them accessible from any place across the globe. Thus, both suppliers and customers can use Excel files irrespective of their locations.

11. Record Keeping

You can use Excel files for audit purposes as it helps maintain records of transactions, track changes in customers' demands and store historical data.

Conclusion

The proforma invoice format in Excel is a user-friendly billing process that allows suppliers to quote estimated costs of goods and services which are to be supplied to customers. It further helps clients understand the prices, quantities and inventories of suppliers, thereby placing orders based on their budget.

If you are a supplier, you can use Excel to prepare this type of invoice for ease of understanding taxes and discounts for clients. Its provision for advance payment and deposits can help you improve the cash flow of your business. 

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