• Commercial invoice : Meaning & Format | Export Procedure

    Commercial invoice

    In global trade, a commercial invoice is an important document provided by the exporter to the importer. The buyer or the importer uses this invoice – and other shipping documents – to clear the shipment at customs in the country of import.

    A commercial invoice will provide all the important information regarding the shipment to buyers, freight forwarders, customs, agents, and banks. It is mandatory for all sea freight and airfreight shipments. So, if an exporter ships airfreight via FedEx or DHL, they must provide a FedEx commercial invoice or a DHL commercial invoice.

    Notably, international commercial invoices do not show tax as international transactions may not be subject to local taxes. Hence, the exporter must take care to provide all the information in the correct format so that the importer does not face any trouble at the customs.

    Format of Commercial Invoice

    Important Elements of Commercial Invoice

    It should essentially contain the following information in detail:

    • Exporter’s company name, address, and contact number
    • Importer’s company name, address, and contact details
    • Buyer’s details if they are not essentially a consignee
    • Mode of dispatch (whether by road, rail, air, or sea)
    • Type of shipment (FCL, LCL, breakbulk, etc)
    • Vessel name and voyage number
    • Names of the loading port, discharge port, and destination
    • Invoice number and date
    • Bill of lading number, Marine cover policy number, Letter of credit number
    • Name of country of origin of the goods
    • Destination of the goods
    • Terms/method of payment (optional)

    Apart from these details, the commercial invoice must also have the product details. This would include the description, quantity, HS code, unit type, price, and currency. Do not overlook to mention the terms of trade or the agreement between the two trading parties. In the end, provide the name, date, and signature of the authorized company representative.

    Doecumenting Commercial Invoice

    Shippers generally prefer using a template in Microsoft Word or Excel to share invoice details. However, these templates tend to miss some important information, which could lead to expensive delays at the customs department of the importing country. It may also confuse buyers and freight forwarders, leading to fines and demurrage charges.

    Exporters could consider using export documentation tools such as IncoDocs which allows one to create packing list and other important shipping documents. Most of these templates are aligned to the UN Layout Key recommendations for trade documentation. This, in turn, ensures trade compliance, doing away with any problems and delays in shipment.

    The best way, however, is to rely on a pre-filled invoice online. One can find an aligned invoice by the UN’s Economic Commission for Europe (ECE). Or refer to sample invoices from international shipping companies such as FedEx and UPS.

    Alternatively, download an invoice format from commercialinvoiceform.org. This allows you to enter the details online directly. It has a glossary of words attached, which outlines the terms on the form by clarifying each section.

    Things to remember

    Remember, there is no specific format for creating an invoice. However, it must have all the basic (but important) details of the transaction.

    Fill up your invoice carefully. While the taxation ID, address details, and recipient’s details are important, note that if the sender or the recipient were an individual (and not a company) their tax ID would ideally be their Social Security Number or equivalent government identification number.

    Finally, ensure that you fill any columns that are not applicable for your shipment with ‘NA’. Do not leave them blank.

    Raghav Khajuria
    Raghav Khajuria
    Leads Marketing activities for Drip Capital.
    3 min read