How to Prepare a Commercial Invoice for Export


We are all familiar with invoices and bills.  We see them every day when we open our mail. So what is the difference between an invoice and a “commercial invoice?”  A commercial invoice is simply an invoice used for international trade. Think of a bill/invoice that you receive at home (power/electricity, telephone/cell phone, credit card, etc.). What type of information do they contain? They contain the information that you will need in order to identify the goods or services that you have purchased and need to pay for.  When you receive an invoice for credit card purchase, it will include the date, what was purchased, where was purchased and the cost or price you pay for what was purchased. The same holds true for a commercial invoice. It must also contain all the basic information (and some specific information when it comes to certain commodities) that will be required by both your foreign buyer as well as customs in the country of destination. The commercial invoice is by far the most important document you will need for export shipments. Although there is no specific form that must be used, there are several items that you will need to have as you prepare the document. A properly completed commercial invoice will facilitate a quick clearance at destination country.  A poorly prepared commercial invoice on the other hand, may not only cause the shipment to be delayed, but it may also trigger an inspection which would cause an even longer delay and perhaps cost associated with the inspection.  Let’s take a look at a good example of a commercial invoice. A commercial invoice will need to have your company information. It may be in the form of your letterhead or header. Itshould contain your address as well as contact phone numbers e-mail.  It should easily identify your company. Your commercial Invoice will need to also include (other than “Commercial Invoice” at the top, in order to clearly identify the document to all concerned), who you sold the goods/products to and who they are being shipped to.  It is important to know that there is a distinction.  You can sell your product to company “A” but ship it/or deliver it to company “B.”  This section should also include the conveyance information. This is where you can show how the shipment left the country.  You can show that the shipment departed on a specific airline/air carrier or ocean carrier by including the bill of lading information. You can also include your invoice number (many companies follow a specific sequence or a internal combination of consignees name and date, etc.). The next section contains sales, conveyance and terms information.  All of these items are important.  All invoices must contain a date.  This is an important part of identifying the transaction. The order number is not necessary but many customers/consignees needed on their part for their records. The sales rep. area will allow you to include the name of any individual or corporation that you may need to pay commission to. This allows you to have a reference in the event that you may need to revisit this transaction in the future. The incoterm is a very important part of your transaction.  It sets the responsibility of cost as well as ownership of the shipment at different stages of the transaction.  This small section is so important, that we will cover it on a separate article and podcast. The terms of sale state what you and your customer have agreed upon as far as payment.  Will they be paying you prior to export (then this box will have “Paid” in it) or have you extended credit to them and the goods are to be paid 30 day from shipping? The “Tax ID” area can be used for countries that require a tax id for imports.

Shipment Date, Order Number, Sales Rep. Incoterm, Ship via, Tax ID, Shipment references

The main body of your commercial invoice will consist of the description information for your goods/products being exported. This is a very important part of the invoice.  You may also include any specific import license  number(s) commodity requirements or additional product information in this section. The 1st column identifies the item. Many companies use item numbers as their reference others do not and simply use this column to identify the different types of commodities being shipped, in other words, item 1, item 2, item 3, and so on. The next section is the description of the items. This section is also very important because it will set forth the information that customs at destination will need to identify the products in the shipment and correctly improperly assessed duties. It is important to provide a harmonized number when possible. It will greatly reduce delays on clearance at destination.  We will cover the Harmonized number, how to, and where to find the information specific to your product on a separate article and podcast. The country of origin information on your product is also very important it is a key component of the duty that your product will pay in any given country. The next few sections flow off one another in that, the quantity, unit price and total flow together. The subtotal and additional costs are part of the next section. It provides an area for insurance, shipping cost, miscellaneous expenses, and your total balance due. It is important to break up the cost because some countries will assess the duties and taxes solely on the product cost (such as the United States) while other countries will assess the duties and taxes on the CIF value (Cost Insurance and Freight). If the sum is broken down the destination country will have the correct information in order to assess duties. If you only provide the CIF value destination country customs does not have the ability to back out the insurance and the freight or other miscellaneous charges and your customer will end up paying duties and taxes on the total amount, making your products’ landed cost higher.  The destination control statement helps to ensure that US exports only go to authorize destinations. This is a minimum requirement for most US export. It notifies your consignee of the requirements and confirms that you are aware of them also. The destination control statement simply states that these are legal exports and that the shipment is being sent to an approved/accepted country as per country as per Export Administration Regulations. This section will also include the final piece of your invoice, which is the name, signature, title, and date for the commercial invoice.

Your commercial invoice should be clear and simple to understand by anyone anywhere in the world. The more complete and clear your commercial invoice is, the quicker your shipments will clear customs anywhere in the world.

Please feel free to use a copy of our Commercial Invoice template.  You are welcome to make any changes.  It is important that you modify it for your own shipment requirement needs.  We must provide a disclosures, so here it goes…  Disclosure:  We are not responsible for the document/template.  You must adhere to the requirements for your product and countries you ship to. This template serves as a reference.

Please continue to visit our site. We will have specific information on growing your business, eliminating the stumbling blocks and helping you make more money. We will cover documentation requirements, terms of sale, transportation options as well as market focus. Our goal is to have you exporting and growing your business. We look forward to working with you and thank you in advance for joining our community and for sharing with us your success as you prove that “The world is your customer.”

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