Generating Proforma Invoice In Tally Prime: A Step-by-Step Guide

A formal sales invoice issued by a business states the amount due from the customer with a request to make payment. It is typically issued after the delivery of goods or services. A proforma invoice is a preliminary invoice issued before the deal is finalized. It helps the customer to get a clear cost estimate and an overview of the terms of sale.A proforma invoice contains relevant details of the impending sales transaction. These details help customers decide whether they want to accept the deal or not. The business in a way commits to supply the goods or services at the specified prices.TallyPrime makes it easy & convenient to create a proforma invoice. As the voucher is marked optional here, it does not affect your books of account. Let’s now understand the proforma invoice setup in TallyPrime and how you can create one in simple steps.

A] Understanding Proforma Invoice

A proforma invoice is a quotation issued to enquiring or interested customers. It contains details such as the description of the item, quantity to be delivered, applicable rate, payment mode, due date of delivery, and other terms of the agreement. The proforma invoice in TallyPrime also includes the names and addresses of the sender & recipient.Following the rule of proforma invoice helps a business establish an understanding with its customers before initiating delivery. The customers are informed about the deliverables and given the price proposal to accept or negotiate as the case may be. The business offers to deliver goods or services at a certain price to obtain an acknowledgement from the buyers. This also helps the business to make optimal internal decisions.

B] How To Create A Proforma Invoice In TallyPrime?

The proforma invoice creation steps are quite simple. The step-by-step procedure on how to create a proforma invoice in the TallyPrime 3.0 version is given below.

1. Enabling “Reversing Journals And Optional Vouchers”

• Go to the ‘Gateway of Tally’
• Now press the ‘F11’ function key
• Go to “Budget and Scenario Management”
• Enable ‘Reversing Journals and optional vouchers’ to “YES” by typing “Y” or “Yes”

2. Open Optional Sales Voucher

• Go to the ‘Gateway of Tally’
• Now click on ‘Accounting Voucher’. You can also click ‘V’ on the keyboard
• Press ‘F8’ on the keyboard to enter ‘Sales Voucher’
• Press ‘Ctrl + L’ together to activate the ‘Optional Voucher’

3. Entering The Details

• Select the date by pressing ‘F2’
• Select the ‘Party Ledger’
• Now enter all the details related to the sales contract
• Press ‘Ctrl + A’ to save the information

After creating the proforma invoice, you have to print it to send it to the customer. Here’s how you can do it:

4. Enter Voucher In Alteration Mode

• Go to the ‘Gateway of Tally’
• Enter display mode by pressing “D”
• Again hit “D” on the keyboard to enter the Day Book or Hit the “PageUp” button on the keyboard to enter the ‘Voucher in Alteration Mode’

5. Select The Invoice To Be Printed

• Press ‘F2’ for the date window
• Enter the proforma invoice date. If the proforma invoice that you want to print appears in the window directly, you can move to the next step
• Press the “Enter” button on the proforma invoice you want to print

6. Print Invoice

• Press ‘Alt+P’ to give the print command
• Choose the printer, format, size, and other printing options
• Press “Y” once the “Print?” command appears

Note: Using the shortcut key for proforma invoices in TallyPrime, you can directly navigate to the proforma invoice dashboard from the Gateway of Tally. Here’s how you can do it:

1. Press ‘V’
2. Hit the ‘F8’ key
3. Press ‘CTRL +L’

C] Key Difference Between Proforma Invoice And Sales Invoice

A proforma invoice in Tally Prime is a preliminary invoice or a quotation given to the prospective customer to establish the agreement and negotiate the terms of the sale transaction. A sales invoice is a final invoice or a document that records the actual sale transaction between the business and its customer. So a proforma invoice is just a provisional invoice that will be followed by an official invoice. The other major differences between a proforma invoice and a sales invoice are listed below:

• Purpose: A proforma invoice is not a legal document. It merely gives an overview of the transaction to the buyer to facilitate decision-making. A sales invoice is a legal document that requests payment from the customer for the delivery of goods or services.

• Time of Issue: A proforma invoice is typically issued before the buyer accepts the offer and places an order. A sales invoice is issued after the order has been fulfilled and delivered to the buyer.

• Utility for Accounting: A proforma invoice is not used by the accounting team. It merely gives an estimate of the future cash flow and the probable date of receipt. A sales invoice is a record of the actual transaction. It is used by the accounting team for tracking receipts & payments.

• Format: A sales invoice contains a description of the item, quantity, rate, total price, payment mode, delivery date, logos, and contact details of both parties. A proforma invoice contains all the details of a regular sales invoice except the official invoice number. It is mentioned as a proforma invoice (and not a GST invoice). The Tally software makes it incredibly easy to create customised invoices for different types of businesses.

Conclusion

Before a sales deal is finalized, both parties negotiate the terms & conditions. The business then sends a preliminary invoice to the customer outlining the deliverables. This provisional document is called the proforma invoice.The proforma invoice contains all the details related to the transaction and helps the buyer decide to accept, renegotiate, or cancel the deal. The official sales invoice is issued after the delivery of goods or services.Though not mandatory, well-documented and accurate proforma invoices facilitate clear communication with customers. This can streamline business functions and prevent disputes at the time of delivery. Efficient invoicing is critical for the functioning of any business. If you are looking for a handy tool, TallyPrime is a powerful software that makes it simple & easy for any business to create, record, and manage invoices.