Proforma Invoice what does it mean?
Essentially, for the seller it means it’s not actually an invoice, which means the vat isn’t owing on it yet. When the customer pays, the vat is owing by the seller and the final invoice issues then.
The customer can’t claim the vat back on a proforma invoice either. The sentence “The goods remain the property of the vendor until paid in full!” Plus “ This is not a vat invoice” regularly are included too.
Here, we are big fans of online accounting packages. They are cheaper than book keepers and much easier for your accountant. If you are already using this, it’s a doddle to insert the above clauses.
The key point about all this is managing your vat bill. It can be easier to go the invoice route if you operate this system. At least then you are claiming vat on all bills received as well.
Anything for an easier life.
In real terms this suits businesses that sell goods, but nothing is stopping professional service providers using it. I,vex seen architects, consultants, auctioneers and so on use this system.
No harm to take a look at this webinar on increasing profits by 61% within 1 year.Small investment for what it gives you.