What is a commercial invoice?
Commercial invoices are used for international shipping. The document gives an accurate description of the goods being shipped and the terms you've agreed with your buyer. To create a commercial invoice, you’ll need to include specific details about the goods, your information and details about the buyer.
This guide will take you through the ins and outs of commercial invoices, their importance to customs, how to create them and when to use them.
What is a commercial invoice?
A commercial invoice is a must-have if you are shipping goods internationally. The document states the buyer, the seller and what shipping terms you've agreed to.
It's used primarily by customs to determine any taxes, tariffs and duties you need to pay before the shipment can enter the destination country. Any inaccuracies or missing information — particularly about the goods and their value — can cause delays or cost more to fix.
When to use a commercial invoice
Use a commercial invoice when you export anything of commercial value internationally — basically anything except documents. You should create a standard invoice for domestic shipping.
Why use a commercial invoice?
You need to use a commercial invoice every time you export goods internationally. It's an important document used by customs authorities to determine the goods' clearance into the country and any tariffs you need to pay.
A commercial invoice also details the terms of sale (Incoterms), which include information about who is responsible for insurance and shipping costs and who's liable at each step during the shipment.
What to include on a commercial invoice
What to include on a commercial invoice can vary, but there are certain details you always need:
Importer and exporter details
Importer and exporter details should be on every commercial invoice. These details include company name, address, phone number, email address and tax identification numbers for both the buyer and seller. If you have a letterhead and logo, use this and make sure the details are free of typos or mistakes.
Shipment details
Shipment details, including date and method (whether air or sea) should be clearly stated on the invoice. It also needs a detailed description of the goods being traded: what they're made of and their purpose, value, weight and quantity.
Transaction details
Transaction details include an order number for easy identification, the amount due including tax, the currency of the trade, how the invoice will be paid and a due date for payment.
How to create and fill out a commercial invoice
To create and fill out a commercial invoice, you need all the correct information. If it's your first time creating a commercial invoice, or you're unsure about anything, it could help to ask a forwarding agent for advice. Missing or wrong information could lead to delays or extra cost. Here are the steps to take.
Gather all required information
Gather all required information before you start and double-check it — accuracy is important here.
Download a commercial invoice template
Downloadable commercial invoice templates make the process simpler. You can grab one from an international delivery service provider, such as TNT Express.
Fill in seller and customer details
Fill in seller and customer details, including the full and up-to-date company names, tax numbers, postal addresses, email addresses and contact phone numbers.
Generate an invoice number
Generate an invoice number just as you would with any invoice.
Include shipping method and quantity of goods
Include the shipping date and method used, as well as the exact quantity, weight and value of items being shipped. Note that the value is the purchase amount when importing and exporting, not the resale value.
Communicate payment details
Communicate the payment details of any transaction for the goods shipped. You can also use Incoterms (3-letter codes established by the International Chamber of Commerce) to define the responsibilities and liability of the buyer and seller throughout the shipment. For more information, check the ICC site.
Harmonised System (HS) code
Harmonised System codes are six-digit codes recognised internationally to classify goods being imported and exported. To find the HS code for the goods being shipped, visit the World Customs Organisation Trade Tools site. Additional information and codes may be required to export out of Australia — see Australian government export advice.
Supply any required supporting documentation
Supply any required supporting documentation, such as dangerous goods declarations or certifications.
Commercial invoice FAQ
What is the difference between a commercial invoice and a normal invoice?
The difference between commercial and standard invoices is their purpose. A standard invoice is issued to request payment after the sale of a service or good.
A commercial invoice is issued to request payment for international shipments and is also used by customs. It includes extra information like weight, country of origin and required classification codes.
Can a commercial invoice be used for payment?
Yes, a commercial invoice can be used to request payment and it also supplies information for customs clearance.
Do all international shipments need commercial invoices?
All international shipments need commercial invoices if the goods have any commercial value. Documents, for example, don't require a commercial invoice.
Who uses commercial invoices?
You use a commercial invoice any time you export goods from one country to another. Customs and border control also use them to calculate tariffs and taxes before clearing the goods into the receiving country.
What is the difference between a proforma and a commercial invoice?
The main difference between a proforma and a commercial invoice is that a proforma is used as an estimate before items are shipped. A commercial invoice is used to request final payment, with accurate costs and values.
International sending essentials
Whether you're a major exporter or just sending products to an overseas customer, you'll need to create commercial invoices. You can use them to request payment from clients, but they're essential for customs and border control officers to assess your shipment before it enters the country.
A good place to start is with a standard invoice – this will include a lot of the information required on a commercial invoice. Then simply customise and add the extra detail you need, like your Harmonised System code and goods information. If you regularly do business overseas, check out what MYOB AccountRight Premier can offer you.
Disclaimer: Information provided in this article is of a general nature and does not consider your personal situation. It does not constitute legal, financial, or other professional advice and should not be relied upon as a statement of law, policy or advice. You should consider whether this information is appropriate to your needs and, if necessary, seek independent advice. This information is only accurate at the time of publication. Although every effort has been made to verify the accuracy of the information contained on this webpage, MYOB disclaims, to the extent permitted by law, all liability for the information contained on this webpage or any loss or damage suffered by any person directly or indirectly through relying on this information.