A commercial invoice is a crucial document used in international trade. A commercial invoice is a required document for the export and import clearance process. It is sometimes used for foreign exchange purposes.
Purpose and Importance:
A commercial invoice serves as a request for payment for goods sold internationally.
It is required by customs to determine applicable taxes, tariffs, or duties for imported goods.
Customs authorities use it to prevent any delays during the import process.
When Is It Required?
A commercial invoice is mandatory for shipments across international borders.
For example, when shipping from the US to Canada, the US to the EU, or any other international destination, you must attach a commercial invoice.
Key Elements of a Commercial Invoice:
Header: Includes contact information for both the buyer (importer) and the seller (exporter).
Product Details:
Country of Origin: Where the goods were manufactured or produced.
Harmonized System (HS) Code: A standardized code that classifies products for customs purposes.
Product List: Describes the items being shipped.
Payment Terms: Specifies how and when payment is expected.
Freight Terms: Details the shipping terms (e.g., FOB, CIF).
Other Relevant Information: Any additional details necessary for customs clearance.
Proforma Invoice vs Commercial Invoice:
Before issuing a commercial invoice, businesses often send a proforma invoice.
The proforma invoice provides the buyer with an estimate of the final invoice cost and delivery timing.
Unlike the commercial invoice, the proforma invoice does not serve as a request for payment.
How to create one
Commercial Invoice Sample
Header Information:
Start by including your company’s details (the seller/exporter) and the recipient’s details (the buyer/importer). Include the following:
Your Company Name and Address: Clearly state your business name, address, and contact information.
Buyer’s Company Name and Address: Include the recipient’s company name, address, and contact details.
Invoice Number and Date:
Assign a unique invoice number to this transaction.
Specify the date when the invoice was issued.
Product Details:
List the items being shipped. Include the following for each product:
Description: A brief description of the product.
Quantity: The number of units being shipped.
Unit Price: The price per unit.
Total Price: Multiply the quantity by the unit price to calculate the total cost for each item.
Currency and Payment Terms:
Indicate the currency in which the transaction is conducted (e.g., USD, EUR, JPY).
Clearly state the payment terms (e.g., “Payment due within 30 days from the invoice date”).
Shipping and Freight Details:
Specify the shipping terms (e.g., FOB, CIF).
Include any freight charges or shipping costs.
Country of Origin and HS Code:
Mention the country where the goods were manufactured or produced.
Assign the appropriate Harmonized System (HS) code for each product. This code helps customs classify the goods.
Additional Notes:
Add any relevant information, such as special instructions, terms, or conditions.
Sign and Date:
Sign the invoice to validate it.
Include the date of issuance.
It’s also important to keep copies of your commercial invoices for your records and for customs purposes.