Pro forma invoices and quotes often cause confusion. Therefore, the Spanish government has published several official gazettes to clarify common questions about the regulations that govern these documents. For example, in the Official State Gazette of January 2024, the Ministry of Finance and Public Service stated that pro forma invoices are not accepted as proof of payment.

In addition, neither of these documents are valid for tax purposes. This means they cannot be used to settle taxes with the Spanish Tax Agency (AEAT) or provide proof of deductible expenses.

However, both pro forma invoices and quotes are legally valid. Despite being informative documents without tax implications, they can have legal consequences. For this reason, it is common for the Spanish government to recommend their use. For example, the European Consumer Centre in Spain (CEC-Spain) advised requesting a pro forma invoice before completing a trip.

Because of the differences between these documents, it is important to choose the appropriate one based on the nature of the transaction. In this article, we explain how to handle pro forma invoices and quotes when delivering business offers to customers. This can help avoid administrative errors and protect your business.

Key takeaways

• Pro forma invoices are drafts of regular invoices that inform customers of upcoming transactions.
  
• Quotes are business offers that customers can accept or reject.
  
• Pro forma invoices and quotes are not valid for tax purposes, but they can be valid for legal purposes.
  
• There are significant differences between pro forma invoices and quotes, such as the content and time of delivery.
  
• A pro forma invoice can be converted into a tax-valid invoice by following a series of steps.
  

What is a pro forma invoice?

A pro forma invoice is an informative invoice that provides the customer with information about a future transaction. Unlike other invoices, it has no tax implications. Although a pro forma invoice generally indicates the price of a sale, it does not require the recipient to pay the amount.

In short, a pro forma invoice is a draft or example of an invoice. It is commonly used in businesses such as restaurants and those that invoice foreign customers. These companies can use pro forma invoices to inform customs officials of the value of goods.

What is a quote?

A quote is a document that is not valid for tax purposes and provides commercial information to the recipient of a transaction. It is a business offer proposal that the customer must accept before the company provides goods or services. For this reason, the final amount of the invoice can differ from the initial price indicated in the quote.

Quotes do not require the customer to pay. However, an approved quote can initiate a contractual relationship that does require payment. Quotes are common in industries such as construction, renovation, repairs, and online services (e.g., ecommerce website creation).

Differences between pro forma invoices and quotes

Pro forma invoices and quotes share some characteristics, such as the lack of tax validity and issuance prior to delivery of goods or services. However, they are actually very different documents. Here are some of the differences:

• Typical content
  Since pro forma invoices confirm transaction details, their content (e.g., issue date and itemized prices) is virtually identical to that of corresponding final invoices. In contrast, quotes are prepared with more flexibility and usually detail features such as the supplies or materials that will be used.
  
• Legal statement
  Since pro forma invoices are similar to final invoices, it is mandatory to add the statement “pro forma invoice” in the header of the document when a pro forma invoice is used to document export trade offers. As indicated in the Export Procedures and Documents Guide, prepared by the Spanish Institute for Foreign Trade (ICEX), the purpose of this statement is to explicitly indicate that these are not final invoices. Although this is not as important when preparing quotes, including the statement “quote” in the document header is a common practice with Spanish companies.
  
• Amount modifications
  Generally, the amount shown on a pro forma invoice does not differ from the amount shown on the final invoice. In contrast, the amount shown on a quote does typically undergo modifications, depending on the materials used and actual working hours.
  
• Time of delivery
  If a company uses both documents, quotes are generally prepared before pro forma invoices. Quotes are part of the initial stage of a transaction when there is often some negotiation with the customer. Once both parties reach an agreement, the final terms are reflected on the pro forma invoice (e.g., the amount).
  

Below, we provide a summary of the differences between quotes and pro forma invoices:

How to convert a pro forma invoice into an invoice

Although current regulations do not specifically govern pro forma invoices, these documents usually include similar information to regular invoices. This includes customer information, detailed descriptions of transactions, and itemized amounts.

However, these similarities do not make pro forma invoices the same as regular invoices. For pro forma invoices to acquire full tax validity, the following conversion process must occur:

• Remove or modify statement
  First, remove the statement “pro forma invoice,” or replace it with the appropriate statement, depending on the type of invoice. For example, if the customer pays in advance, include a specific statement that identifies the document as an “advance invoice.” This is mandatory if the invoice is issued through TicketBAI.
  
• Add or modify numbering
  Pro forma invoices do not have to be numbered. If they are, it is only for internal control purposes. However, numbering is one of the most important pieces of information on the final invoice. An invoice must have a number—and, optionally, a series—that identifies it in sequential and chronological order.
  
• Change the date
  If the issue date of the pro forma invoice does not match that of the final invoice, update it to accurately reflect when the transaction or advance payment occurred.
  
• Record the invoice
  Before recording the document and converting it into a regular invoice, verify the tax information, such as the Tax Identification Number (NIF) and itemized value-added tax (VAT). This step requires no manual intervention if the business uses Stripe Tax, a tool that automatically applies VAT rates from Spain and other countries to calculate and collect taxes on Stripe transactions. Furthermore, it allows businesses to automatically check customers’ intracommunity VAT numbers to apply the appropriate tax exemptions or reverse charges.
  

How Stripe can help manage pro forma invoices and quotes

Properly managing pro forma invoices and quotes is important because they become legally valid when customers accept or sign them. In many cases, businesses give these documents to potential customers, so it is important to avoid errors when processing them. This can help build trust and increase revenue.

To expedite the issuance of pro forma invoices and quotes, the Stripe App Marketplace offers access to an extensive library of invoicing tools. For example, Billit is an electronic invoicing platform that allows you to create pro forma invoices and quotes. You can also generate advance invoices that allow customers to pay in advance for materials needed to complete projects.

In addition, Invopop allows you to assign the “pro forma” label to invoices. Once received, your customers can accept or reject them directly, which expedites formalization of agreements.

Both pro forma invoices and quotes serve as the basis for the subsequent issuance of final invoices. To avoid problems—such as penalties from the AEAT or complaints from customers—it is important to verify that all data entered is correct. This can be achieved by limiting or eliminating manual transcriptions of information.

Automated payment platforms—such as Stripe Payments—can eliminate manual tasks in all processes of invoice issuance, collection, and payment reconciliation. This can lead to faster collections, with many customers paying Stripe invoices within the first 24 hours.

Frequently asked questions