All That You Should Know About Commercial Invoice
The business invoice is one of the most vital records in global commerce and ocean freight shipment. It is a legal document used as a contract and evidence of sale between the buyer and seller in an international transaction issued by the seller (exporter) to the buyer (importer). The business invoice does not convey ownership of the items or a title to those being sold, in contrast to the Bill of Lading. However, determining and assessing duties and taxes is necessary for customs clearance. The price(s), value, and quantity of the products sold are all specified in the business invoice. It should also include any trade or sale terms the buyer and seller have agreed upon before the transaction is completed.
It might also be necessary for financial transactions (such as when paying with a Letter of Credit) and might be required by the buyer’s bank to authorize the release of funds to the seller for payment. Information required on a commercial invoice for shipping. When filling out a commercial invoice, it is extremely important to ensure that information is clearly and accurately filled out.
Which is the Best Commercial Invoice Template?
There are plenty of commercial invoice templates and samples to choose from online. While there is no fixed commercial invoice format, most of the information required is very similar and standardised across all templates. Whichever template you choose, ensure that the following details are included:
Information related to the transaction
- Invoice number
- Invoice date
- Order number
- Total sale amount
- Currency
- Payment instructions
Information related to the exporter and importer
- Exporter/seller information (name, address, phone number, etc.)
- Exporter/seller’s tax identification number (e.g. VAT, EORI, etc.)
- Importer/buyer information (name, address, phone number, etc.)
- Importer/buyer’s tax identification number (e.g. VAT, EORI, etc.)
- Notify the party’s information
Information related to the shipping of the merchandise
- Bill of Lading number
- Forwarding agent
- HS Code
- A clear description of goods (no. of packages, units, weight, etc.)
- Incoterm under which the merchandise has been sold
- Origin of merchandise
- Intercom
- Date of exportation, means of transport, and final destination
- Shipper’s signature
Difference Between Commercial Invoice and Packing List
The transaction and shipment information listed on the commercial invoice must correspond to that on the packing list.
While the information required on both documents is highly similar and the seller/exporter issues both, the two documents serve very different purposes.
With a focus on the physical description of the items being carried, the packing list serves a more logistical purpose. Additionally, it is utilised for stock-keeping and inventory purposes to ensure that all goods delivered by the exporter are received in perfect condition. This document will be necessary if there are any disagreements or claims with the shipping company, customs, or between the buyer and seller of products.
On the other hand, the commercial invoice describes the financial transaction for the sale of the items being transported, including the terms, conditions, and payment information.
Conclusion
It is a legal requirement to fill out a commercial invoice accurately. Failure to do so may result in lengthy hold-ups and shipping delay costs. Given that a commercial invoice is also used for customs declaration purposes, any misinformation may lead to underpayment of the correct amount of duties and taxes due and their legal ramifications.
