What is an advance invoice?
An advance invoice — also called a proforma invoice, pre-invoice, or payment request — is a document you send to ask a customer to pay before you deliver the goods or provide the service. It tells them how much to pay and how, so you can start work (or order materials) with less risk of not getting paid.
In most places, an advance invoice is not a tax document and not part of your official accounting records. It's a request for payment, not proof that a sale happened. The real, legally binding invoice comes later — once you deliver the work or, in many jurisdictions, once you actually receive the payment.
Advance invoice vs. proforma invoice: is there a difference?
In everyday use, no — the terms are usually interchangeable, along with "pre-invoice" and "payment request." Where people do draw a line, it's usually about how much money is involved:
- An advance invoice typically asks for a partial payment — a deposit or down payment before a longer job.
- A proforma invoice more often asks for the full amount upfront, and sometimes doubles as a price quote or a document needed for customs on international shipments.
Neither one is a recognized tax document on its own, whichever name you use.
What should an advance invoice include?
Because it isn't a legal document in most jurisdictions, an advance invoice doesn't have to follow the strict formatting rules that apply to a real invoice. Even so, it should be clear enough that your customer can pay it correctly and match it to the right order:
- A clear label — "Advance Invoice" or "Proforma Invoice" — so nobody mistakes it for the final bill
- Your business details and your customer's details
- A description of what the payment is for
- The amount requested and the due date
- Payment details (bank account, reference number, or payment link)
Turning it into a real invoice
An advance invoice is never the end of the story — it's always followed by a real invoice. Once you deliver the goods or service, you issue the actual invoice for the full amount and subtract whatever was already paid as a deposit, so your customer only pays the difference.
If you're VAT-registered and the payment arrives well before delivery, many countries also require a proper invoice for the payment itself, separate from the final delivery invoice — the rules and deadlines for this vary by country, so check your local VAT requirements.
A quick note on tax treatment
Rules here differ a lot by country. In general, sending an advance invoice by itself usually doesn't trigger a tax obligation, but receiving the payment often does if you're VAT-registered — accepting money before delivery can create a tax point that requires you to account for VAT and issue a proper invoice within a set deadline. Since this varies by jurisdiction, check with your accountant or local tax authority before relying on this for a specific transaction.
Advance invoices in Lucanto
In Lucanto, you can send an advance (proforma) invoice in minutes, and once the payment arrives, turn it straight into a real invoice without retyping anything. Regular invoices are available on every plan, including Free; advance invoices are part of the paid plans (Starter and up). See what's included in each plan on the pricing page.
Related reading: what a credit note is and when to issue one.
Frequently asked questions
Is an advance invoice legally required?
No. In most places there is no legal requirement to send one — it is a business courtesy that lowers your risk of non-payment. You can just as easily ask for a deposit by email and issue the real invoice once you deliver or get paid.
Can I cancel an advance invoice?
Yes, more easily than a real invoice. Since it is not a tax document, you do not need a formal credit note — a short written cancellation, or a new advance invoice replacing it, is usually enough. That changes only if you already issued a real invoice for a payment you received.
What happens if the customer never pays it?
Nothing happens automatically — an advance invoice has no legal weight on its own. You simply do not start the work, or you follow up the same way you would for any unpaid request.
Do I charge VAT on an advance invoice?
Not on the advance invoice itself. The VAT question comes up once you actually receive the payment, and the rules for when and how much vary by country — see the tax note above.
Is a proforma invoice the same as a quote?
Related, but not identical. A quote proposes a price before the customer has committed to anything; a proforma invoice is issued once they have agreed and you are asking them to pay.