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Quotation vs Proforma Invoice

A quotation and a Proforma Invoice may appear similar, but they serve different purposes.

A quotation is a price offer sent before the customer decides to purchase. It helps the customer evaluate pricing and compare vendors.

A Proforma Invoice is usually issued after the customer accepts the quotation but before the goods or services are delivered. It confirms the commercial terms and is commonly used to collect advance payments or help customers obtain internal approvals.

Unlike a Tax Invoice, a Proforma Invoice does not create an accounting entry or GST liability by itself. It simply communicates the agreed transaction before the actual sale takes place.

Many manufacturing and project-based businesses regularly use both documents as part of their sales process.

Managing proforma invoices and quotations manually can lead to errors and delays. A Quotation Management Software helps businesses streamline both documents, ensuring accuracy and faster turnaround times.

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