What are Commercial Invoices?
A commercial invoice is a customs declaration that is used to export or import goods across international borders. It is a statement of what is being bought and sold, and includes information that helps customs officials assess import duties and taxes. A commercial invoice includes the same information as a regular invoice, plus additional details that help customs officials process the shipment. This includes the country of origin, transaction numbers, and classification codes.
A commercial Invoice contains pertinent information about goods in Carriage and acts as a Bill of Sale between a Buyer and Seller.
It should include:
- Addresses of seller/shipper & buyer/receiver
- Credit terms and methodology for payment
- Currency of transaction
- Date of invoice / transaction
- Description of what is being transported
- EORI or tax ID numbers
- Packages, pallets, crates etc
- Other information required to allow the goods to cross international frontiers e.g. Commodity (Tariff) Codes & supplementary units & country of origin
- Net weight of each product/item Gross weight of each product/item
- References numbers & important transaction numbers e.g. part or purchase order numbers
- The Incoterms (and freight charges for pre-DAP terms)
It might include:
- Any changes from a Contract or previous agreement
- Any other marks, numbers and measures
- Invoice number or other auditable reference numbers
- Port of export and import
- Proforma reference number
- Transport tracking number e.g. CMR, bill of lading
Uses
- The Commercial Invoice is the key document for carriage of goods, it is not only Customs Brokers who require this document.
- Exporters might use it to assist with Loans, Grant programs, & Reclamations.
- It is an important supporting document for any potential insurance claim where a suitable policy exists.
- If a letter of credit is required, the buyer’s bank will require to examine it before release of payment.
- Customs Authorities will need it for calculation of potential duties and taxes, determining the true value of the goods, inspection purposes and trade statistics.
- Used along with an Inspection Certificate it can prove the quantity and quality of a consignment.
- Can be used to raise/initiate other Official, governmental certificates and permits and in conjunction with these for Inspection purposes by other Regulatory Authorities.
Preparing the Form
Paying attention to detail while setting up a Commercial Invoice system will be rewarded. Your invoice must be prepared exactly as you and your customer agree, and as per the proforma invoice if one has been produced. This includes intricate details e.g. whether you should prepare the commercial invoice on your company letterhead or not.
A proforma invoice is usually one generated when for example an order is transmitted to a supplier. A Commercial Invoice will detail the goods after they are prepared for transport, and that will omit things like parts that have failed quality control. It is a pre-advice document which serves as an Instruction for Action, it can be used to define information, to initiate the Negotiation Process and it outlines the expectations for an Export Sale. This widely recognised document can serve as a quotation and can contain a validity period as well as estimated transport costs. It can easily be converted to a Commercial Invoice and can be used by banks where they are acting as an Intermediary.
