“What is commercial invoices?” is a common question in international trade. A commercial invoice is a crucial document that serves as an itemized record of a transaction between a buyer and a seller. What is a commercial invoice used for? Well, it’s used as a primary document for customs declaration, helping determine the accurate value of goods being imported or exported. Businesses often ask, “What is a commercial invoice’s content?” This document typically includes information about the products or services sold, their quantities, prices, terms of sale, and payment details. In essence, a commercial invoice is not just a bill for payment, but also a legally binding record of the commercial agreement. So, whether you’re a seasoned importer or just starting with international trade, understanding what is commercial invoices and their significance is vital for a smooth and compliant business operation.
It is difficult to imagine having any transaction without keeping an invoice. Invoices are essential documents that are needed for many reasons. Even the smallest one for a tiny purchase may be kept for a tax return. Then, what is commercial invoices and how does it differ? A
commercial invoice is a crucial document in international trade that provides
important information about a shipment. Learn more about its importance and how
to create one in this guide.
1/ What is commercial invoices?
It is a document that is used for customs
declarations when an item is transported across international borders. In other
words, when a business exports products, it needs a commercial invoice for the
export clearance process at the border.
Key information included in a commercial
invoice
The information that should be on a commercial
invoice is the following:
· Exporter
(seller) information
o Name
o Address
o Phone number
· Exporter’s
tax identification number
· Importer
(buyer) information
o Name
o Address
o Phone
number
· Importer’s
tax identification number
· Contact
information to notify the party
Additionally,
the following information regarding the shipping of the merchandise is also
important:
- Forwarding agent
- Insurance
- A bill of lading number (a code to identify a bill of lading, which is a legal
document issued by the carrier, detailing the type, quantity, and destination
of the merchandise) - HS code (a standardized classification system that categorizes goods and products
that are shipped internationally) - Origin of merchandise
- Date of exportation
- Means of transport and final destination
- Shipper’s signature
2/ How to create a commercial invoice
The seller
(exporter) issues the invoice to the buyer (importer). It is a legal document
that serves as proof of sale and has the function of a contract in international
trade. The commercial invoice should include a correct description of the
merchandise, price value or an approximate value, quantity of products, and
sale conditions of said items.
If you don’t
have your own invoices, it is best to download a commercial invoice template.
Make sure it comes from a reputable site.
Then fill
in the seller and buyer details as detailed before. After that, you need to
assign a unique invoice number. If you’re going to create many commercial
invoices, it would be better to have a sequence of numbers to follow up more
easily.
Always include the terms of sale and the terms of payment, and don’t forget to specify
the type of currency.
Give a complete and accurate description of the items that are exported. This includes
a lot of detail; not only the items, but also the type of packaging, the gross
weight, the amount of items, and an exact measurement of the package(s).
Make sure you have the total net weight and gross weight of each item that is shipped.
Write down the shipping method, whether the goods are transported by air, sea, or land.
Last but not least, add the price, and if there are any additional charges, list them
here too.
3/ Tips for ensuring accuracy and compliance with
commercial invoices.
Commercial invoices must be accurate. Any mistake will cause considerable delays at the
border, which can be frustrating for the exporter and the buyer as well. Errors
in the invoice also affect the duty and tax charged.
So, before finishing your commercial invoice, ensure that there are no discrepancies. Even
if you’re in a hurry, it is best to make extra time to double-check instead of
wasting valuable time and money at the border because you didn’t perform a last
revision.
