Proforma Invoice Template - New Zealand

Both are preliminary documents, but they serve different purposes. A proforma invoice is a formal estimate of charges that functions as a preliminary invoice, showing line items, quantities, and rates in invoice format. A quotation is typically more informal and may not include the invoice structure or payment terms. A proforma invoice signals readiness to proceed and sets clearer expectations about pricing, payment methods, and delivery timelines. For NZ businesses, a proforma invoice establishes a clearer contractual foundation if the client accepts it, whereas a quotation leaves more room for negotiation.

Yes, if your business is GST registered, you must include GST on proforma invoices. The proforma should clearly show the GST amount and the total including GST, just as you would on a final invoice. If you're not GST registered, include a note stating "GST not applicable" to avoid confusion. The GST treatment on a proforma invoice must match your GST registration status and the intended supply to ensure compliance with IRD requirements. This accuracy prevents disputes when the final invoice is issued.

A proforma invoice is not automatically binding, but it becomes enforceable once your client accepts it. In NZ law, acceptance of a proforma creates a contract for those goods or services at the stated price and terms. If the client accepts the proforma and you proceed with the work, they cannot later claim different terms applied. However, if circumstances change materially before work begins, both parties may negotiate new terms. Always ensure clients understand that acceptance of the proforma commits them to those specifications and pricing.

Contractors and consultants typically use proforma invoices for complex projects with variable costs or when clients need approval before work begins. Sending a proforma upfront protects you by establishing agreed pricing and scope before investing time. It's especially valuable when quoting for construction, IT services, or consulting where project variables could change costs. A proforma also manages client expectations about payment timing and final amounts. For smaller, fixed-price jobs, an invoice issued after completion may suffice, but a proforma builds trust and prevents scope creep.

Contact the client immediately to discuss the variance and agree on adjustments before issuing the final invoice. If costs increased, explain the reasons and confirm whether they'll accept the higher amount or if you need to adjust the scope. If costs decreased, consider whether a credit or discount is warranted. Document the agreement in writing via email or an amended proforma. Never issue a final invoice that significantly differs from the accepted proforma without prior written approval, as this breaches the understanding established by the proforma and damages client relationships.

Proforma invoices typically remain valid for 30 days unless you specify a different expiration date on the document. After 30 days, prices and availability may change, so it's reasonable to ask clients to reconfirm acceptance or request an updated proforma. The validity period protects you from outdated quotes and encourages clients to decide promptly. Always state the expiration date clearly on your proforma to avoid confusion. Once a client accepts the proforma and work has begun, the terms generally lock in regardless of the original expiry date, though this depends on your agreement with the client.

Yes, the IRD requires that you retain records of all invoicing documents, including proforma invoices, for at least 7 years. This is especially important if a proforma leads to a disputed transaction or if you need to demonstrate your pricing history. Proformas also provide evidence of proposed supply for GST purposes. Store proformas systematically—either digitally or in hard copy—alongside your corresponding final invoices so you can quickly reference the original estimate if questions arise. Organized record-keeping protects your business in audits and supports accurate financial reporting.

You can modify minor details like contact information or formatting before the client accepts it. However, once the client has accepted a proforma, avoid changing material terms like price, scope, or payment conditions without their written consent. If significant changes are necessary, send an amended proforma clearly marked as a revision with the new effective date. The original proforma remains part of your records. Proactive communication about changes prevents misunderstandings and protects you contractually. Always document client approval of any amended proforma in writing.