What is a Commercial Invoice?
A commercial invoice is a legal document used in international trade to provide detailed information about goods being exported or imported. It serves as a billing document between the seller (exporter) and the buyer (importer) and is required for customs clearance in many countries.
Unlike a proforma invoice (which is a preliminary document), a commercial invoice is an official request for payment and includes final transaction details such as pricing, quantity, and shipping terms.
Why is a Commercial Invoice Important?
- Customs Clearance – Helps customs officials determine duties, taxes, and tariffs.
- Proof of Sale & Ownership – Acts as a legal document for international transactions.
- Payment Processing – Used by banks for trade finance and payment verification.
- Dispute Resolution – Serves as evidence in case of disputes between buyers and sellers.
- Regulatory Compliance – Ensures businesses comply with international trade laws.
Key Elements of a Commercial Invoice
A well-prepared commercial invoice should include the following:
Seller & Buyer Information
- Exporter (Seller): Name, address, contact details.
- Importer (Buyer): Name, address, and contact information.
Invoice Details
- Invoice Number (Unique identification for tracking).
- Invoice Date (Date when the invoice is issued).
Shipment Details
- Port of Departure & Destination (Where the goods are leaving from and arriving).
- Shipping Method (Air, sea, road, or rail).
- Carrier Information (Freight company or courier handling the shipment).
- Bill of Lading (if applicable) – A document issued by the carrier as proof of shipment.
Description of Goods
- Product Name & Description (Exact details of goods being shipped).
- HS Code (Harmonized System Code) – A standardized code for classifying products for customs.
- Quantity & Unit of Measure (e.g., pieces, kilograms, liters).
- Unit Price & Total Price (Cost per unit and total invoice amount).
Currency & Payment Terms
- Currency (USD, EUR, GBP, etc.) – The currency in which the invoice is issued.
- Payment Terms (e.g., Net 30, Letter of Credit) – Specifies how and when payment is expected.
Incoterms (International Commercial Terms)
Defines the responsibilities of the buyer and seller regarding shipping, insurance, and customs. Common Incoterms include:
- EXW (Ex Works) – Buyer takes full responsibility from the seller’s premises.
- FOB (Free on Board) – Seller covers transport to the shipping point; buyer covers further costs.
- CIF (Cost, Insurance & Freight) – Seller covers shipping and insurance to the buyer’s port.
Taxes, Duties & Additional Fees
- Customs Duties & Taxes – Estimated taxes to be paid at the destination country.
- Insurance Costs – Whether the shipment is insured and who bears the cost.
Declaration & Signatures
- A statement certifying the invoice’s accuracy.
- Signature of the authorized company representative.
Commercial Invoice Example (Template Format)
| Field | Details |
|---|---|
| Invoice Number | INV-2025-001 |
| Invoice Date | February 7, 2025 |
| Exporter (Seller) | ABC Exports Ltd, USA |
| Importer (Buyer) | XYZ Imports Ltd, UK |
| Port of Departure | New York, USA |
| Port of Destination | London, UK |
| Shipping Method | Air Freight |
| Product Description | Leather Handbags |
| HS Code | 4202.21 |
| Quantity | 500 pieces |
| Unit Price | $30 per piece |
| Total Invoice Amount | $15,000 USD |
| Incoterm | FOB (New York) |
| Payment Terms | Net 30 |
| Signature | Authorized Representative |
Download a Free Commercial Invoice Template [Here] (You can customize this with your company details).
How to Create a Commercial Invoice (Step-by-Step Guide)
Step 1: Use a Standard Invoice Format
Start with a professional template that includes all mandatory fields.
Step 2: Fill in Business & Buyer Details
Accurately enter your company name, buyer information, and invoice number.
Step 3: Describe the Goods Clearly
List product names, HS codes, unit prices, and total amounts.
Step 4: Specify Incoterms & Payment Terms
Clarify shipping terms and when payment is due.
Step 5: Add a Declaration Statement & Signature
Include a certification statement and sign to validate the invoice.
Commercial Invoice vs. Other Trade Documents
| Document | Purpose |
|---|---|
| Commercial Invoice | Used for customs clearance and payment requests. |
| Proforma Invoice | A preliminary quote before finalizing a sale. |
| Bill of Lading | A receipt issued by the carrier for shipping goods. |
| Packing List | Lists detailed packaging information of the shipment. |
Common Mistakes to Avoid
Incorrect HS Codes – Leads to customs delays or penalties.
Missing or Incomplete Information – Causes shipment hold-ups at customs.
Currency Mismatch – Always confirm the correct currency for international payments.
Not Using Incoterms Properly – Clearly define seller and buyer responsibilities.
Final Thoughts
A commercial invoice is a vital document in international trade, ensuring smooth transactions and customs processing. By including all essential details, businesses can prevent delays, avoid disputes, and comply with global trade regulations.
Need a professional commercial invoice template? Download our free version and start using it today!
