Quick answer: send a proforma invoice when the customer hasn't confirmed yet and you want them to agree first. Send an invoice (in Malaysia, the e-invoice) once the sale is confirmed and it's time to get paid and record it. Same-looking document, but one is a "do you agree?" and the other is "please pay."
If your customer only remembers these three lines, they'll never mix up the documents again.
01. Which document should I send?
This is what you're really asking. Forget the theory for a second — here's the document to send for each situation:
| Your situation | Send this |
|---|---|
| Customer is only asking for the price | Quotation |
| Customer wants to confirm / get approval before paying | Proforma invoice |
| Customer has confirmed the order | Invoice / e-invoice |
| Goods delivered or service done | Invoice / e-invoice |
| You need it in your tax records / SST | Invoice / e-invoice |
Or follow the flow — this is the whole journey of a sale in one picture:
02. Think of it like this
If it still feels abstract, here's the everyday version everyone gets straight away:
The salesman gives you a booking form. Do you own the car yet? No — it just says “this is the car you'll buy.” After you pay, you get the official invoice. The proforma is the booking form; the invoice is the real thing.
The menu shows prices so you can decide. The bill comes after you eat. Nobody confuses a menu with a bill. Proforma = the menu (“this is what it'll cost”); invoice = the bill (“please pay”).
03. Why send a proforma at all?
Fair question — why not just send the invoice straight away? Because sometimes the sale isn't final yet, and you don't want to record a sale (or ask for SST) on something that might still change. A proforma is what you send when:
- ✔ The customer is still deciding
- ✔ The customer needs approval from their boss or finance department
- ✔ The customer is applying for a loan or financing
- ✔ The customer needs a document to arrange import / customs
- ✔ The customer wants to reserve stock at today's price
In all of these, the sale isn't confirmed — so you give them a formal figure to say “yes” to, without committing either side yet.
04. Proforma vs invoice, in plain words
Most comparison tables are written for accountants. Here's the same thing written for the person actually sending the document:
| The question in your head | Proforma invoice | Invoice (e-invoice) |
|---|---|---|
| What is it really saying? | “Are you okay with this price?” | “Please make payment.” |
| Can you officially ask the customer to pay? | Not yet — they haven't officially bought | Yes — this is the real bill |
| Does it affect your profit, sales & tax reports? | No — nothing is recorded yet | Yes — the sale is now in your books |
| Can LHDN accept this as a tax record? | No | Yes — it carries SST and is the tax document |
| Can you still change it? | Yes — it's not final | No — a fix needs a credit note |
| When do you send it? | Before the customer confirms | After the customer confirms |
The one line that matters most: only the invoice counts as an official record and tax document. A proforma is like a draft — used before the sale is confirmed. Once the customer says “yes,” the draft is replaced by the real invoice. That's why you should never stop at a proforma if the sale has already gone through.
05. A quick story: Ahmad Furniture
A customer wants 10 office chairs from Ahmad.
- Ahmad sends a quotation — here's the price.
- The customer replies: “Can you issue a proforma? My finance department needs it to approve the payment.” Ahmad sends a proforma invoice.
- The finance department approves it. The customer pays.
- Ahmad issues the real invoice / e-invoice — now the sale is recorded and tax-compliant.
Same deal, three documents, each doing its job at the right moment. That's the whole thing.
06. The Malaysia part: SST & e-invoice
This is the bit the international guides skip. In Malaysia, the document you choose decides what happens with tax.
A proforma cannot carry SST and LHDN won't accept it as a tax record — it's only an offer, so tax has no place on it yet. Once the sale is confirmed, the proper document is the e-invoice: the LHDN-compliant tax invoice that carries SST (where it applies to your goods or service) and goes into your official records. e-invoice is an ongoing requirement Malaysian businesses are moving to.
- No SST on it
- LHDN doesn't accept it
- Just an estimate to approve
- Carries SST where it applies
- LHDN-compliant tax record
- The real, recorded sale
So the sequence for a Malaysian SME is simple: send the proforma to get the “yes,” then issue the e-invoice as the real bill. Jumping straight from a proforma to “paid” with no proper invoice behind it is what causes trouble later.
07. The questions everyone actually asks
The honest, one-line answers to what people really worry about:
My customer already paid the proforma — can I skip the invoice?
No. Payment doesn't replace an invoice. Once the sale is confirmed you still issue the proper invoice (the e-invoice, where required) — that's the document your accounts and LHDN rely on.
Can I claim SST using a proforma?
No. A proforma can't carry SST or support any tax claim. Only the tax invoice / e-invoice can.
Can the customer pay using a proforma?
Yes. A buyer can pay against a proforma, often as a deposit or advance to confirm the order. It just doesn't become a tax invoice by being paid — you still issue the real invoice afterwards.
Can I issue more than one proforma?
Yes. You can send several — for example after the customer asks to adjust the quantity or price — because it isn't the final record. Only the invoice needs to be clean and sequential.
The customer cancelled — do I still need to issue an invoice?
No. If the sale never happened, simply don't convert the proforma into an invoice. Nothing was recorded, so there's nothing to cancel.
Can I edit a proforma?
Yes. Change the quantity or price freely — it isn't the final tax document yet. Once it becomes an invoice, though, a change needs a credit note.
08. Proforma vs quotation, commercial invoice, PO & sales order
A proforma sits among a few similar-looking documents. Quick way to tell them apart:
A quotation is the looser, earlier price offer — “about this much.” A proforma is the tidier, itemised version the customer approves — “exactly this, if you agree.”
A commercial invoice is for international shipping and customs — it declares the real value of goods being exported. A proforma may go before the sale; the commercial invoice is the final one customs relies on.
A PO comes from the buyer — their formal request to buy. A proforma comes from the seller — your formal offer to sell. Same deal, opposite sides.
A sales order is your internal note to start fulfilling the deal. The proforma is what you send the customer; the sales order stays on your side.
09. Common mistakes to avoid
Most of the trouble comes from a handful of small mistakes. Watch for these:
10. Your one-page cheat sheet
Screenshot this, print it, or pin it near your desk. Whenever you're unsure which document to send, it answers in one line:
Turn an approved proforma into a compliant e-invoice without retyping
- ✓ Issue proforma-style documents and quotations to win the “yes”
- ✓ Convert an approved proforma into an LHDN-ready e-invoice — same system
- ✓ One transparent yearly price, no consultant and no setup fee
How Niagawan handles both
With Niagawan, you issue proforma-style documents and quotations to win the “yes,” then convert an approved proforma into a proper, e-invoice-ready tax invoice without re-keying anything. The pre-sale document and the compliant e-invoice stay connected — so nothing gets lost between “shall we go ahead?” and “here's your bill.”
Niagawan is cloud accounting and invoicing built for Malaysian SMEs — over 40,000 businesses since 2016 (4.7★ from 500+ Google reviews). New to the document itself? The full proforma invoice guide covers what goes on it, with a free Malaysia proforma template you can download and fill in today.
Proforma invoice vs invoice FAQ
Which document should I send to my customer?
Send a quotation when they are only asking the price; a proforma invoice when they want to confirm or get approval before paying; and an invoice (in Malaysia, the e-invoice) once the sale is confirmed, the goods are delivered, or you need it in your tax records.
Can a proforma invoice be paid?
Yes. A buyer can pay against a proforma, often as a deposit or advance to confirm the order. It does not become a tax invoice by being paid, so you still issue the proper invoice for the confirmed sale.
My customer already paid the proforma — can I skip the invoice?
No. Payment does not replace an invoice. After the sale is confirmed you still issue the proper invoice (the e-invoice where required) — that is the document your accounts and LHDN rely on.
Can I claim SST using a proforma invoice?
No. A proforma cannot carry SST or support any tax claim. Only the tax invoice / e-invoice can.
Can I issue more than one proforma invoice?
Yes. You can send several — for example after the customer asks to change the quantity or price — because it is not the final record. Only the invoice needs to stay clean and sequential.
My customer cancelled — do I still need to issue an invoice?
No. If the sale never happened, simply do not convert the proforma into an invoice. Nothing was recorded, so there is nothing to cancel.
Can I edit a proforma invoice?
Yes. You can change the quantity or price freely because it is not the final tax document yet. Once it becomes an invoice, a change needs a credit note.
Is a proforma invoice the final invoice?
No. It is the step before the final invoice. The final, binding document is the invoice (tax invoice / e-invoice) you issue after the sale is agreed.