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Why is the commercial invoice important?

What is a commercial invoice?
What is a commercial invoice?

What is a commercial invoice?

A commercial invoice is a document created for international shipments that contains important information about the export. It includes more details than a regular sales invoice and is used to calculate duties and confirm that the goods are legal. Commercial invoices are also used to create customs declarations.
It is important to obtain a commercial invoice and not a pro forma invoice, which is not accepted by customs.

What's in the commercial invoice?

Commercial invoices should be issued in English. If other languages ​​are used, at least the detailed description of the product should be translated. Including the HS code will significantly speed up customs clearance. The invoice includes the following information:

  • Invoice number corresponding to the packing slip number
  • Invoice date
  • Order number
  • Consignee information (recipient): name, address, phone number, tax ID, etc.
  • Shipper Information (Sender)
  • Party Information Notified to Shipper
  • Shipping Information: Freight Forwarder, Date of Export
  • Clearly describe the goods (type, package quantity, unit, weight, etc.) according to the packing list and bill of lading
  • HS code
  • Incoterms on which the sale of goods is based
  • The price of each item in a specific currency (usually in U.S. dollars)
  • Total sales
  • Payment instructions
  • Insurance
  • Origin of the product (country of origin or manufacture)
  • Invoice signature with issuer stamp

When do I need to issue a commercial invoice?

A commercial invoice is required for any goods shipped outside the EU. Used as a customs declaration, provided by the exporter (shipper).
In other words, every time you ship a package from the EU to a country outside the EU, you need to fill out a commercial invoice.

Do you need to keep records of commercial invoices?

Yes, it is very important to keep records of commercial invoices and any customs documents.

If you are VAT registered, you will also need to record your exported goods in your VAT account. This is important as you will need this information at all times when completing your VAT return.

/ By tjchinafreight ivy / Shipping

Proforma vs. Commercial Invoice: What’s the Difference?

Proforma vs. Commercial Invoice: What's the Difference?
Proforma vs. Commercial Invoice: What's the Difference?

Tell me about the pro forma invoice.

"Proforma" means "Proforma," a term used to estimate the price of services or invoices for goods prior to shipment or delivery. In situations where you can't provide your customers with an exact price, you can post pro forma information, but you can still give them a rough idea of ​​the costs involved.
If you import goods as part of your business, you can use a proforma to estimate their customs clearance value, but you still need to provide a commercial invoice within 180 days.

When do I use commercial invoices?

Because a commercial invoice is a document issued after the shipment or delivery of goods, it serves as a legal record of the transaction once the sale is completed.
This type of invoice also contains more details than a pro forma invoice, including information about the buyer and seller, the place of purchase and a full description of the goods. Also, if you are in your business dealing with international shipments, you actually need to use a commercial invoice.

Purpose of Proforma Invoices and Commercial Invoices

The purpose of a pro forma invoice is to give the customer a clear idea of ​​what to expect. This is a bona fide estimate that shows what can be known ahead of time, such as price and terms, and the average billable amount for the type of item requested. Customers can also use pro forma invoices to decide whether to place an order.
The purpose of a commercial invoice is to request payment for an item actually sold by showing the amount actually due.

Format of Proforma Invoices and Commercial Invoices

A pro forma invoice may look almost identical to a commercial invoice. However, it should be clearly marked "form" or use other language to reflect the fact that this is only an estimate and should not be paid until the work is completed and the final invoice is issued.

Proforma vs. Commercial Invoice: 3 Key Differences

In conclusion, although pro forma invoices and commercial invoices look very similar, there are three main differences between the two documents:

1. When will it be released

When a company receives an inquiry from a potential international customer for one or more of its products, it issues a pro forma invoice as a quotation, which lists not only the cost of the goods, but also the terms of sale. Potential buyers can accept the price and terms listed in the pro forma invoice, or make a counter-offer to negotiate.

2. What do they include

While the type of information that appears on both invoices may be similar, the commercial invoice should represent the final agreed transaction details, including any necessary additional import and export control information.

In the absence of a formally negotiated and agreed sales contract, pro forma invoices and commercial invoices are part of the written record containing the contract between the buyer and the seller. Check out the free webinar, create an international sales contract, and learn more details about the Battle of Forms.

3. How to use them

As mentioned above, buyers and sellers use pro forma invoices to negotiate prices and terms of sale. The buyer can also use it to obtain any necessary import licenses, overcome any potential import restrictions and arrange a letter of credit or some other payment process.

Commercial invoices are not only a collection tool, they are also used by customs agencies to determine appropriate duties, taxes and other import charges and to ensure compliance with export requirements. It also provides the necessary information to transfer the goods from the seller to the buyer.

/ By tjchinafreight ivy / Shipping

Consular Invoice Guide

Cargo Container ship in import export and business logistics, Shipping harbor.
Cargo Container ship in import export and business logistics, Shipping harbor.

What is a consular invoice?

Invoice for shipment of goods certified by the consulate of the country of destination of the goods. This invoice is used by the country's customs officials to verify the value, quantity and nature of imported goods in order to determine import duties. In addition, export prices can be checked against current market prices in the exporting country to ensure that no dumping has occurred.

Key takeaways

  • A consular invoice is a document detailing the contents and details of the goods, consular certification by the country to which the goods are sent.
  • Invoices are used by customs officials to confirm the items in the shipment, the quantity of the goods and the cost to determine import duties.
  • Export prices are scrutinized relative to market prices in the country of origin to ensure that unfair trade practices known as "dumping" do not occur.
  • Through dumping, exporters gain a competitive advantage over other suppliers by selling goods in foreign markets below domestic costs.

Format and contents of a consular invoice

A consular invoice may contain the following details –

  • Names of the importer and exporter with their relevant details
  • Ports of Origin and destination
  • Description of the goods
  • Additional charges (packing, insurance, etc.)
  • Total value of the shipment
  • Name of the certifier
  • Identification marks and numbers

THE GOVERNMENT OF INDIA
THE GOVERNMENT OF INDIA

Special attention items

The consular invoice also includes a copy of the commercial invoice in the language of the country that provides full details of the goods being shipped. Generally, the purpose is to provide foreign customs authorities with a complete and detailed description of the goods in order to collect the correct import duties. In addition, the export price of the commodity can be assessed against the current market price in the exporting country in order to avoid the process of export dumping.

Dumping is the sale of a product in a foreign market below its cost in the domestic market in order to maintain an advantage over other suppliers of the product. It is considered an unfair trade practice and is regulated by various governments. 2 In the case of a consular invoice, the invoice can be used to calculate the difference between the price of the imported product and the product of the exporting country to prevent unfair trade practices of dumping.