What is a commercial invoice?

An export shipment almost always needs one. It is the document that says what is in the boxes and what the buyer owes for them. Other papers, such as the packing list and the bill of lading, should agree with it.

This is a general explanation, not legal or customs advice. Required fields differ by country, so check with your forwarder or customs broker.

Why a commercial invoice matters

Customs looks at the commercial invoice to decide what duties and taxes apply. It checks the goods, the value and the country of origin. If the invoice is vague or wrong, the shipment can be held, and the buyer may pay more than expected.

The invoice is also part of the document set a bank checks under a letter of credit. A bank can reject documents that do not match the credit's terms exactly.

What goes on a commercial invoice

Layouts differ, but most include:

1. The seller's and buyer's names and addresses, and the consignee if different.
2. An invoice number and date.
3. A description of each product that is clear enough to identify it, with the HS code where the destination requires one.
4. The quantity, unit price and line total.
5. The currency and the invoice total.
6. The Incoterm and the named place, for example "FOB Shanghai".
7. The payment terms.
8. The country of origin of the goods.
9. The seller's signature or declaration, where required.

Commercial invoice vs pro forma invoice

A pro forma invoice is sent before the sale is final. It is a quotation in invoice form, used to get approval, to arrange payment or to apply for a licence. The commercial invoice is issued once the goods ship, and it is the real bill. The details of the two should match unless the order changed.

Commercial invoice vs packing list

The invoice shows prices and totals. The packing list shows what is in each package and how much it weighs, and normally shows no prices. A buyer, a forwarder and customs read them side by side, so the quantities must agree.

An example from product sales

Say a seller ships 10 pallets of resin at $1,200 a pallet under FOB. The invoice lists 10 pallets at $1,200, a line total of $12,000, an Incoterm of "FOB" with the named port, and the payment terms. If the sales order said 10 pallets but the packing list shows 9, the paperwork disagrees. The buyer or the bank may hold payment until it is sorted out.

That is why one record should feed all three: the order, the invoice and the packing list.

Common mistakes

• Vague descriptions. "Chemicals" is not enough. Name the product.
• Missing or wrong Incoterm. It determines which costs sit in the price.
• Different numbers on different documents. Quantities, values and descriptions should agree everywhere.
• Leaving out the country of origin. Customs often asks for it, and some buyers also need a separate certificate of origin.
• Using the pro forma as the final invoice. Issue a fresh one when the goods ship.

Related terms

• Pro forma invoice: the preliminary version sent before the sale is final.
• Packing list: the physical description of the same shipment.
• Bill of lading: the carrier's receipt and transport document.
• Certificate of origin: the formal statement of where the goods were made.

How PromptLab handles it

PromptLab creates an invoice from a sales order, so the lines and amounts come from the order, not from retyping. The order also holds the trade terms (the Incoterm) and the payment terms. The shipping documents, such as the packing list and the bill of lading, can sit on the account's Files tab next to the quote and the email thread. Check the invoice fields against what your destination needs.

Frequently asked questions

What is a commercial invoice used for?

It tells customs what is being shipped and its value, and tells the buyer what to pay. It is also one of the documents a bank checks under a letter of credit.

What is the difference between a commercial invoice and a proforma invoice?

A pro forma invoice is a preliminary document sent before the sale is final. A commercial invoice is the final bill issued when the goods ship.

Does a commercial invoice need an Incoterm?

It is normal to state the Incoterm and the named place, because they show which costs the price includes.

How many copies of a commercial invoice are needed?

It depends on the destination, the carrier and any letter of credit. Ask your forwarder or customs broker how many originals and copies are needed.

Can I make an invoice in PromptLab?

Yes. You can create an invoice from a sales order on the account.