What is a Commercial Invoice?

A commercial invoice is a special document that is required for international shipments to clear the customs process. Why do customs agencies require a commercial invoice? Each country looks at the goods that are entering their borders and must quickly determine what the product is, where it came from, and its monetary value so they can calculate the relevant taxes, tariffs, and duties. Who pays for those charges is determined by the Incoterms. We have a video explaining what those are, which you can find here.

To create or fill out a commercial invoice you will need to have the following information:

First is information on the buyer and seller, the seller being the exporter and the buyer being the receiver, which is also known as either the consignee or the importer of record, since they are the ones requesting the goods to enter the country . You will need both parties’ name or/businesses name, city and street address, phone number, postal code, country, and a tax identification number.

Next you are going to need an invoice number and an invoice date. The invoice number should be a unique number that will only be used for that shipment.  This could also be a booking number, or a PO number used for that order.

You will also need to add a description of the products you are selling as well as the quantity of units, total weight, the price per unit, subtotal, and a total price. Accuracy is key here, as improper data can cause items to be flagged during the customs process. You also need to provide the Country of Origin, which is the country name of where the products were made, and in some countries a Certificate of Origin may be required to prove where the items came from. You can find more information on that here.

Another number that needs to be included on a commercial invoice is a Harmonized System Code, also known as an H.S. code. H.S codes are created by the World Customs Organization, and they categorize or classify products based on type of product, intended use, and its nature. If you are in the U.S., you will use a code known as a Schedule B number, which consists of the product’s six-digit H.S. code as well as four more numbers indicating exactly what the product is. If you do not know what your products H.S. or Schedule B number is, there is a free online tool from the Census Bureau that can help you classify your product. These codes are updated every 5 years, so make sure to check that your numbers are up to date.

Once you have all this information, you are ready to create your Commercial Invoice. You can create your own, look for a blank template online, or give Ark a call if you need help. You will need to have 3 copies of your commercial invoice, one for the customs agency of the exporting country, one for the customs agency for the importing country, as well as one for the customer or buyer.

You can also choose to attach a packing list, which would just be a detailed list of all the products being shipped as well as their size and dimensions. If your items are considered hazardous, you will also need a dangerous goods declaration. If you need help with either of those things, feel free to reach out to our team at Ark for help.