As a legal document, it is one of the most important in international trade. The Commecial Invoice is provided by the shipper and serves as a contract and an evidence of sale between the buyer and seller.
The commercial Invoice contains information about the shipment, including mainly a description, the value of the goods and also the shipper information. A commercial invoice is part of the documentation for importing or exporting and it is, therefore, required for customs clearance purposes to calculate and assess the duties and taxes due.
But make no mistake, unlike the B/L (Bill of Lading) the commercial invoice does not indicate the ownership of goods nor does it carry a title to the goods being sold.
The commercial invoice is mainly used for detailing the price, value, and quantity of the goods that are being sold. It should also include the trade or sale conditions agreed upon by both buyer and seller of the transaction being carried out.
It can also be necessary for payment purposes (e.g. in the event of payment via Letter of Credit) and may need to be issued by the buyer to its bank to instruct the release of funds to the seller for payment.
Different Types of Invoice
The commercial invoice is considered the official document when exporting or importing. It means that the information detailed in the CI (Commercial Invoice) should be the final information. However, it can be adjusted if needed.
Besides the commercial invoice, there are other documents, which are not considered official documents, therefore, they can’t be used for dealing with the customs, for example. The two most popular documents are: Pro-forma Invoice and the Purchase Order.
Pro-forma Invoice — It’s very similar to an estimate or a quote. The pro-forma invoice gives your buyer an estimate of the costs of products or services they’re purchasing.
Purchase Order — It contains the details similar to those found on an invoice, but it’s issued by a buyer to serve as an offer to the seller.
Both the Pro-forma Invoice and Purchase Order are considered “Pre-Invoice”, they are a type of “commercial invoice draft”.
Be Aware When Filling Out Your Commercial Invoice
Because it is a legal document, it is legally required to fill it out accurately. If there is any failure to do so, it might result in lengthy hold-ups and shipping delay. Remember that the CI is used for customs declaration purposes, so any misinformation may lead to underpayment of the correct amount of duties and taxes due and their legal ramifications.
Information Required for Shipping
As we’ve noticed, filling out the commercial invoice is clearly an important task. Given that, it is extremely important to make sure that the information described is clear and precise.
- Invoice number
- Invoice date
- Order number
- Total sale amount
- Payment instructions
Exporter and Importer Details
- Exporter/seller information (name, address, phone number, etc.)
- Exporter/seller’s tax identification number (eg. VAT, EORI, etc.)
- Importer/buyer information (name, address, phone number, etc.)
- Importer/buyer’s tax identification number (eg. VAT, EORI, etc.)
- Notify party’s information
About the Shipping of the Merchandise
- Bill of Lading number
- Forwarding agent
- HS code
- Clear description of goods (no. of packages, units, weight, etc.)
- Incoterm under which the merchandise has been sold
- Origin of merchandise
- Date of exportation, means of transport, and final destination
- Shipper’s signature