How to Fill Out an International Commercial Invoice
In a world of ‘just in time delivery’, getting products to the customer without delay can be the most challenging part of the transaction. Overloaded logistics networks and tight customs controls are causing millions of tonnes of cargo to be held at seaports and airports across the globe. In some cases, it’s the paperwork, or lack of it, that causes these delays. To avoid the stress of hold-ups and extra customs checks, companies must ensure their export docs are accurate, with no ambiguity. Central to this task is the commercial invoice – the most important piece of paper in the chain.
Read on to discover why an accurate commercial invoice for customs is essential - and how to make sure yours are always mistake-free.
What is a commercial invoice for export?
A commercial invoice, (also known as a customs invoice), is used in international trade. It contains more information than a standard sales invoice, and includes data such as the certificate of origin, customs declaration, EORI number, HS code, and the shipment’s final destination. Customs authorities rely on commercial invoices to calculate import duties and to determine the legality of the shipment. Failure to provide an accurate customs invoice can create hold-ups, generate handling charges, or even lead to fines or seizure of the goods.
How to fill out a commercial invoice – the information you will need
There is no universal commercial invoice, but most free invoice templates will ask for the following information to comply with customs requirements.
Accurate shipment data
Provide the full contact details for all parties – exporter and importer - with name, address, telephone number, and email. Indicate the country of origin of the goods, plus their gross weight and net weight, and the number and weight of individual packages in the bundle. (Indicate weight in kg and lbs for US destinations).
Provide the total value of the goods in the chosen transaction currency. Include an invoice number and date of issue for the commercial invoice. Provide the terms of sale, such as the price paid by the buyer, as well as the payment method, currency and any applicable discounts or extra charges.
Indicate how the shipment is being transported, and the route used. Provide the name, address and telephone number of any shipping agents. Indicate Incoterms, including details on delivery and payment.
Goods classification numbers
- Provide the HS code and a description in plain English of the goods. (Find UK HS codes here).
- Provide your UK EORI number. If you don’t have one, you can register here.
Mistakes to avoid when filling out a commercial invoice
There is little room for error on a commercial invoice. Mistakes can be expensive. Avoid these common faults to ensure your shipments arrive without a hitch:
Wrong contact information
Failure to provide correct contact details could see your shipment lost en route, or even worse, make it look like you are concealing something. Customs authorities may detain goods they cannot verify.
Incorrect product description and packing information
Customs agents calculate duties and taxes based on this information. Errors could increase the import duties your client has to pay.
Incorrect goods classification
It is important to give your goods the correct classification (HS) code. Getting it wrong can be costly and lead to delays. Include all ten digits of the classification number in your paperwork.
Wrong or mismatched pricing and valuations
Your sales price must match the valuation given on the commercial invoice. If they don’t, you could be fined. Make sure you clearly indicate the currency used in the transaction.
Incorrectly claiming duty-free status
Shipping under a free trade agreement allows you to sell your goods duty-free. However, not all goods are covered by free trade agreements. Claiming the preferential rate when you don’t qualify is fraud. This can result in substantial fines.
Which currency should my commercial invoice use?
Issuing your commercial invoice in a foreign currency exposes you to the risk of currency fluctuation. Shifting values could mean your goods are worth less when they arrive than when you shipped them. Alternatively, you can invoice in your own currency and pass the risk to the buyer. But this could make you less competitive. If you decide to invoice in a foreign currency, lower the risk by setting the exchange rate at the point of sale, charging more to cover potential losses, or hedging the currency at a fixed rate using a forward contract.
Still unsure? Talk to Clear Treasury. Cut the confusion.
Your commercial invoice is your shipment’s passport. Accuracy is important for the free flow of goods. For assistance with your export needs, contact Clear Treasury today. If you’re looking for further information regarding mitigating the risk of your currency exposure, talk to the experts at Clear Treasury. Our team of specialists can help guide you on the best tools to use to ensure your business stays profitable. Become a client today, call +44 (0)20 7151 4870 or email email@example.com.
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