0 Illustrations and exercises accounts second year intermediate

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Accounts Illustrations ch 1

Last Updated On: 27-Oct-2021Posted On: 27-Oct-2021

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[color=#000000]Can a proforma invoice be cancelled?[/color]

[color=#000000]As a proforma invoice is not a legally binding document, or the official invoice used for accounting, they do not need to be cancelled. Similarly to a quotation document, if the sale does not go ahead, no action is required to edit or cancel the proforma invoice.[/color]

[color=#000000]How to create a proforma invoice[/color]

[color=#000000]The same method used to create regular invoices can be applied to create a proforma invoice. Most accounting or invoicing software include proforma invoice templates. Alternatively, you can create your own proforma invoice in applications like Microsoft Word and Google Docs.[/color]

[color=#000000]What to include on a proforma invoice[/color]

[color=#000000]The primary purpose of a proforma invoice is to show your customer the details of the proposed transaction. As such, it should include the same information as the final invoice:[/color]

  • [color=#000000]The unique invoice number[/color]
  • [color=#000000]Your company name, address and contact details[/color]
  • [color=#000000]Your customer’s name and address[/color]
  • [color=#000000]Date of issue and the due date[/color]
  • [color=#000000]Description of the goods[/color]
  • [color=#000000]How long the price is valid[/color]
  • [color=#000000]A link to any applicable terms or conditions[/color]
  • [color=#000000]Payment terms (whether or not the customer makes payment at the proforma stage, it’s worth giving them instructions on how they’ll pay)[/color]
  • [color=#000000]VAT (Although a proforma isn’t a tax invoice, you should still show what the VAT amount is expected to be)[/color]

[color=#000000]Unlike the final sales invoice, the proforma should include:[/color]

  • [color=#000000]The term "Proforma invoice", so your client knows it’s not a sales or tax invoice[/color]
  • [color=#000000]The phrase "This is not a tax invoice"[/color]

[color=#000000]Now you know all about proforma invoices, you hopefully have one less detail to worry about in your sales process. If you’d like more flexibility in managing your business’s finances, we have a range of solutions that could help. Our [url=https://www.americanexpress.com/uk/business/business-charge-cards]Business Cards[/url] can help you unlock the buying power to grow your business, all while earning valuable rewards.[/color]


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