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hello and welcome back in this session youll learn about pro forma invoices a pro forma invoice is a way of asking for money or making a payment demand without affecting your company accounts as you saw in the previous tutorial when you created an invoice it affected our profit and loss report as you can see here now the issue is if youve not yet received the funds or you dont end up receiving the funds youll still be liable for any v80 or corporation tax thats accrued and likewise if you look at the transfer report to see what agency fees you need to transfer from your clients account to your business operating account its going to give you false readings because youve applied charges but youve not yet received the funds so this is where pro forma invoices come in the best practice if someone owes you money is to first raise a pro forma invoice once youve received the funds you then give an invoice on receipt what this means is that when youre looking at the profit and loss