Crucial Things to Know About Commercial Invoice

If you are into international trade or ocean freight shipping, then you must have certainly come across the term commercial invoice. And if you are not aware of this term, you need to know that this is a crucial document to be issued while trading/shipping goods across international boundaries.

Invoices are simply records of business transactions, however, commercial invoice differs from other types of invoices as they serve for a greater purpose. The information filled in the commercial invoice should be clear and accurate as misinformation can lead to delay in shipment, shipping delay costs, hold-ups and other such problems.

A commercial invoice should comprise of

A commercial invoice should mandatorily have the following information:

- Business’s full name, address, country

- Their customer’s full name, address and country

- Invoice number

- Complete details of the goods that will be shipped

- Goods’ net weight without packaging

- Gross weight of the goods to be shipped after packaging

- Settlement - Per unit price in currency payment

- Payment terms

- Delivery terms

- Purchase order number

- Reference numbers, if any

- Goods transit date

- Freight charges

- Shipping insurance information

- Discount applied if any

- Mode of transport that will be used for shipping

- Final destination

- Signature of the shipper

What makes commercial invoice different from other popular types of invoice

We’ve compared commercial invoice with other traditional types of invoices which will make you understand the difference between the two:

Standard invoice - This regular type of invoice, include invoice number, buyer and seller information, services offered, list of itemized goods, product prices, payment terms and payment due date.

Recurring invoice - If you want to create the same invoice for the customer on a repeated basis - for example - bi-weekly or per month, then recurring invoice works the best. It is suitable for the services you offer on a regular basis.

Progress invoice - It is an incremental invoice type which is popularly used in the construction business. It is actually used in stating the progress of long-term projects and let the client know how much they need to pay, currently.

Utility invoice - Utility services like electricity, telephone, internet, sewage, water etc. all use utility bills. This invoice includes payment due period, previous payments that are done and any pending payments.

Timesheets - This is also a type of invoice that is used by lawyers, consultants, contractors, tutors or any professionals who charge fees or payments on an hourly basis.

Pro-forma invoice - Pro-forma invoice is like an estimate or quote which is sent by the business to its customers stating the estimated cost of services or goods they are interested in. This type of invoice is mostly not recorded in accounts receivables as they are used for quotations.

Purchase order - Like any other invoice, even purchase order includes all the necessary details. The only difference is, it is created by the buyer for the seller that serves as an offer.

All these clearly show the purpose of the commercial invoice and other traditional invoices is a bit different.

Piece of advice

It is always wise to print two copies of the commercial invoice. One you can keep inside the shipment while the other you can envelop and attach to the package from outside.