How to Make a Commercial Invoice? Step-by-Step Process

A commercial invoice is a crucial document containing all the specific information about the goods. Missing out on any single piece of information gets your export canceled. Therefore, you must know what information is required while preparing a commercial invoice.

Besides, a commercial invoice acts as proof of delivery with goods details. With the commercial invoice, there would not be any false claims from the buyer’s side.

IIsn’t it safe and secure? But how to make a commercial invoice question remains the same.

All the required information for writing a commercial invoice is precisely curated in this article.

So strap in and get all the details about it.

What is a Commercial Invoice?

A commercial invoice is a crucial document in international trade transactions that serves as a detailed record of the goods being bought and sold between a buyer and seller from different countries. It is a legally binding document that provides a comprehensive description of the products, including their quantities, values, and terms of sale.

How to Prepare a Commercial Invoice?

To create a commercial invoice, there are certain steps and procedures to follow as your export can be terminated even if one piece of information is missed. So, before creating a commercial invoice, you must be aware of the information needed.

Let’s have a look at the step-by-step guide procedure to create a commercial invoice:

1. Download a commercial invoice template

To create commercial invoices for your organization, first of all, you need to download and personalize a suitable template for a commercial invoice for your business. You can also opt for an international invoice template that makes work easier to create an invoice. A typical example of a commercial invoice format is used by FedEx or the United States Department of Commerce.

2. Type in the seller’s correct details

Include your business’s contact information that could be reached, like company name and address, email address, and phone number.

3. Type in customers’ details

The next thing to do is identify how to fill out a commercial invoice. It is made possible by entering the correct information of the buyer or the company patronizing your business. Information to be included in the contact name, address (official location) of the buyer or company’s contact details, and shipping address if it is not the same as the billing address. You can also have the custom’s official address or location.

4. Put a unique invoice number

All your invoices should have unique identification in the form of invoice numbers and harmonized tariff codes or either. The best way to number an invoice is through sequential identification. Your first invoice number should be 001, and other numbers on the sequence will follow.

5. Add the customer’s reference number

Aside from having an invoice number on the export documentation, add a reference number to the invoice before sending it. The buyer reference number on a commercial invoice is provided, so you can identify the customer you’re dealing with when there’s a complaint or when there’s a need for the buyer or company to contact you.

6. Add your sale terms

Sale terms are any information on the risk and cost you and the buyer is taking when going into business. When there’s a complaint on sales by the buyer, the initial agreement on terms of sale will serve as legal proof for you as the buyer because the seller’s details have been notified beforehand. But you also need to include it in the commercial invoicing templates.

7. Include your payment terms

To avoid issues of payment, let the customer understand in the invoice what your policies and terms of payment are. Have the terms of sale that have been agreed upon by you and your customer. It can appear on the purchase order, applicable taxes, customs duties, and total value, but your payment terms on the commercial invoice samples will serve as a friendly reminder.

8. Include your preferred currency

On the invoices, let the person be aware of what is the purpose and currency you want to be paid with for the total value. It should have been agreed upon before going into business with the buyer, so there wouldn’t be confusion or delay in payment.

If you live in the USA and you’re selling to a customer who lives overseas, your preferred currency will be US dollars. You also need to mention bank details like an international bank account number (if available) to guide customers to make the payment.

9. Indicate the shipment method

Your commercial invoices must indicate how you’re shipping the products over to your customer, maybe by surface shipping, air, or ocean

10. Indicate the quantity

Your commercial invoices should mention the product details in the quantity of purchase, per unit value, and total shipment weight.

11. Fully describe the items

A complete and detailed description of all the shipped items is to be written in the billing document used. This bill should consist of the appropriate measurement and name of items, type of packages they’ll be delivered in, the container type if applicable, total weight, unit value, and quantity of the items.

12. Add the unit of measurement

The measurement of the items should be expressed in the same unit throughout, including the weight of each item and overall net weight.

13. Include the price and value

The grand price of all the goods sold in the shipment should be written out as well as the total commercial unit price of the products.

14. Note package signs and marks

Marking or symbols on the shipment details should be noted in the commercial invoice form. If the boxes or number of packages are much, you can name and label them to help the client understand better.

15. Add additional costs

In case there’s an occurrence of miscellaneous cost, include it in the invoice form with clear descriptions and a packing list. Miscellaneous things like maintenance, security, and transportation cost should also be noted.

Example of Commercial Invoice Templates

Here is an example of commercial invoice templates available in three different formats, i.e., MS Word, MS Excel, and PDF. You can download it right from here and start sending invoices along with the goods.

So, these are the different formats that you can share with the buyer and attach at the time of exporting.

Do you remember we discussed the proof of delivery in the introduction? That’s one of the purposes; let’s have a look at the different purposes.

Why Do We Need A Commercial Invoice?

When processing international shipping, a commercial invoice is a primary document for customs clearance. Other than this, what else you can expect is:

• Helps to understand both buyers and sellers about the commercial invoice line items bought and sold.
• Used as a mode of payment by the buyer.
• Importer or customs authorities require commercial invoices.
• The government asks for commercial invoices to evaluate the actual value of goods to implement duties at customs.

Now that you know how important it is to create a commercial invoice when shipping internationally, let’s know what wealth of information will be required.

Facing a Rejected Commercial Invoice: Let’s Navigate the Roadblocks in International Shipping

The world of international trade thrives on clear communication and meticulous documentation. One crucial document in this process is the commercial invoice, acting as the passport for your goods. However, even the most comprehensive invoice can encounter roadblocks, leading to its rejection by customs. But fear not, for this doesn’t have to spell disaster. Here’s how to navigate the situation:

1. Understanding the reasons:

First, it’s crucial to identify the reason for the rejection. Common reasons include

• Discrepancies: Inaccuracies or inconsistencies between the invoice and other shipping documents, such as packing lists or bills of lading.
• Missing Information: Omission of essential details like HS codes, product descriptions, or unit prices.
• Valuation Concerns: Customs doubt the declared value of the goods, potentially suspecting undervaluation to avoid higher duties.
• Incoterms Confusion: Misinterpretation or unclear definition of responsibilities and risks associated with the shipment as outlined by the Incoterms.

2. Taking Action:

Once you understand the reason for rejection, prompt action is key:

• Contact the Buyer: Immediately inform your international buyer about the issue and collaborate to rectify the discrepancies.
• Correct the Invoice: Make the necessary corrections to the invoice, ensuring it aligns with all other shipping documents and accurately reflects the transaction.
• Seek Guidance: Consult with a customs broker or freight forwarder for professional advice and assistance in navigating the rectification process. They can help with:

1. Identifying the specific requirements of the destination country’s customs authorities.
2. Ensuring the revised invoice adheres to all regulations.
3. Facilitating communication with customs officials.

3. Remember:

• Time is of the Essence: Delays in resolving the issue can lead to additional storage fees, demurrage charges, and even potential product spoilage.
• Preventative Measures: To avoid future rejections, ensure thorough verification of all information on your commercial invoice before initiating the shipment. Utilize clear and consistent language, double-check for any discrepancies, and seek professional guidance if needed.

By understanding the potential pitfalls and taking prompt action, you can overcome the hurdle of a rejected commercial invoice and ensure your international shipment continues its journey smoothly.

Information to Gather Prior to Creating a Commercial Invoice

When you are creating an international shipment, you need to provide information both to custom authority and on the shipping label:

Seller’s Details (Name Address, Phone, Email, and Company Tax ID)	Consignee/Customer’s details (Name Address, Phone)	Delivery Options (Air, Sea, Road, Rail)	Shipment Type: LCL, FCL, Breakbulk
Loading & Unloadingm	Invoice Number & Date	Bill of Lading	Country of Origin of
Port	–	Number & Letter of Credit Number	Goods
Final Delivery Country	Payment Method	Product Information (HS code, quantity, unit type, product description, product code, currency, and purchase price)	Trade Terms
Voyage Number	Additional Note	Name & Signature	Tax

Is a Commercial Invoice Needed to Ship Documents?

Commercial invoices are only useful for the supplier who is creating an invoice for the exports of goods and services with commercial value. For clarification, typed or written commodities, do not have commercial values and are regarded as other shipping documents.

Any commodity that is regarded as documents needs no commercial invoice for shipping and doesn’t need any shipping documents that is the reason for export. Only products with commercial value require a commercial invoice for customs purposes.