What is a Commercial Invoice?

A commercial invoice is a legal document used to track the movement of goods, especially where customs are involved. It is provided by the seller to the buyer to act as a customs document for clearing the products for export across international boundaries.

A commercial invoice is not used as a receipt for goods payment by the seller to the buyer. However, it is among the most important documents used while clearing the goods at the border. Simply put, it is a critical document in foreign trade that validates a transaction. Commercial invoices have a straightforward format. Just like the standard invoice, they contain the description of goods, quantities, price per unit and the total amount to be paid. But it is more detailed than a regular sales invoice or a receipt.

What differentiates it from a regular sales invoice is the following features in its format.

  • First, it has more detailed information about the name and addresses of both the seller and the buyer, not forgetting the country of both parties
  • It also has information about the shipping of goods, which include the shipping company name, mode of payment for the transportation and date of freight.
  • Lastly, it also entails the description of cargo in transit such as the quantities, weight, and currency used in valuing the goods. It is also essential to include the goods manufacturer and the nature of goods to be shipped.
  • Also, a commercial invoice must clearly illustrate the invoice purpose and indicate the seller’s reference number and the customs order number. Most importantly it must have a statement certifying that invoice is accurate and that the information about goods to be shipped is correct. It also must be signed by the supplier. When a commercial invoice goes through, it will also bear the signature or stamp of the customs department.

When to Use a Commercial Invoice

Understanding that the commercial invoice is used for the control of importation of goods helps to create an understanding of the level of importance of this document.

📤 The Exporter

As the business that is exporting the goods, you have the responsibility to produce the commercial invoice. This is required so you as the exporter can get the export documents that are going to be necessary to ship your goods. It is also proof of ownership of the goods. Then finally it is the document that is going to initiate the payment of the goods.

📥 The Importer

The importer requires the commercial invoice as this is the agreement that exists between the seller who is the importer and the buyer who is the importer.

📦 To Clear Customs

The commercial invoice should contain all the necessity information that customs will require. It will dictate clearly who the product is coming from and who the buyer is. It must be signed and dated to make it valid. The prices must be clearly detailed as freight and insurance will not be subject to custom charges.

🌍 Shipping Outside of the Country

Anytime you are shipping a product outside of the country, it must go through customs. Customs always requires a commercial invoice. It is the information contained on the invoice that allows the customs department to determine what the custom charges are going to be.

The Importance of a Proper Commercial Invoice

It can cost a lot of money to send a product outside of the country. The commercial invoice can help to ensure that the proper custom prices are being used. Also, it can help in making sure that the product is not delayed at customs. Customers expect to receive their goods in a timely manner. A commercial invoice can help to make this happen.