Small businesses mix these three documents up all the time — and the difference matters, because only one of them counts for VAT. Here's the plain-English version.
The quote
A quote is a proposal: "here's what it will cost." It creates no obligation to pay and nothing happens in your books. Best practice is to give it a validity period ("valid for 30 days") so old prices can't be held against you.
The pro forma invoice
A pro forma invoice looks like an invoice but isn't one. It's a request for payment before the real invoice — typically used to collect a deposit or upfront payment before you deliver. Two things every SA business owner should know:
- A proforma is not a tax invoice. Your customer cannot claim input VAT from it, and you don't declare output VAT off it.
- Once the customer pays (or you deliver), you issue the real tax invoice — that's the document that goes into both sets of books.
Because a proforma is asking for money, it should always show your banking details and a payment reference.
The tax invoice
The tax invoice is the legal document for VAT purposes. For amounts over R5,000 SARS requires a full tax invoice showing, among other things: the words "Tax Invoice", your name, address and VAT number, the customer's name, address and VAT number, an invoice number and date, a description of the goods or services, and the VAT amount or a statement that VAT is included. Between R50 and R5,000 an abridged tax invoice (fewer details) is acceptable.
If you're not VAT-registered, you simply issue an invoice — never call it a tax invoice, and never show VAT you're not registered to charge.
The typical flow
1. Quote — customer says yes. 2. Pro forma invoice — customer pays the deposit into your account. 3. Tax invoice — issued on delivery; this is what enters the books and the VAT201.
Doing this without retyping everything
In 360books the three documents are one flow: create a quote, send it as a pro forma invoice (your banking details are added automatically), and convert it to a tax invoice in one click when the deal lands. The invoice even carries a "View & pay" link so the customer can settle by EFT or card. Try it free with the live demo.