Proforma › Proforma for advance payment

Using a proforma invoice to get an advance

Most small businesses send a proforma when they want money before they start. A clear proforma gets paid faster and avoids arguments later.

What to write

• How much advance: "50% advance (₹51,920) with the order, balance before dispatch."
• Where to pay: bank name, account number, IFSC and UPI ID. The maker prints a UPI QR code with the full amount; the buyer can change the amount in their app for a part payment.
• What happens if the order is cancelled: for example "Advance is not refundable once material is purchased."
• When the price is held until: the "Valid until" date.

A worked example

A furniture maker in Punjab quotes a school in Haryana: 40 benches at ₹4,200 = ₹1,68,000, IGST 18% = ₹30,240, total ₹1,98,240. Terms: 30% advance. The school pays ₹59,472 by NEFT.

1. The maker gives a payment receipt for ₹59,472 marked "Advance received".
2. Goods are sold, so no GST is paid on the advance itself.
3. On delivery the maker issues the tax invoice for ₹1,98,240 and shows "Less advance received ₹59,472, balance ₹1,38,768" in the notes.

Advances for services

For services, GST becomes due when the advance is received. Issue a receipt voucher showing the tax on the advance, pay that tax in the month's return, and later issue the tax invoice for the full service, adjusting the tax already paid. Your accountant will want both documents.