Are you all set to start importing goods from China?
You have collected all shipping documents, paid shipping costs, and verified the Chinese supplier’s export documents to execute the trade.
But, have you ever seen an invoice sent by the supplier? What if something comes up along the way?
Did it bother you because they didn’t give your customs commercial invoice for whatever reason? It can be frustrating, right?
Thus, you need to acquaint yourself with some crucial information about the commercial invoice.
They are one of the crucial pieces of info every buyer needs to have at fingertips. This info concerns the commercial invoices.
With this, you are sure of your package getting to its destination as well as the invoice.
When you import goods from China, there are standard requirements used for exporting.
A commercial invoice acts as a bill. It’s a legal customs document describing and recording a transaction across the borders.
It also confirms that a sale happened somewhere. It is usually issued once a delivery has taken place and before processing any payment.
What Is a Commercial Customs Invoice?
A custom commercial invoice is a document that a shipper gives during export. It has information about the shipment and goods descriptions.
Besides, it also has the value of the goods and the shipper’s information. It’s part of export and import documentation.
The customs authorities may use it to access applicable taxes and duties. The info about shipment should include the type of the imported goods.
The information should also be on the shipping weight, the value of the goods, and the import duty and taxes.
Commercial invoices are an essential part of international shipping. They aid the shipment to get through customs while shipping.
Are you planning on importing goods from China? Do you want to get involved in international shipping?
Then, it is the most crucial information that you need to know more about, and you can’t afford to ignore.
Suggested reading: Customs bond
Who Provides a Template for the Commercial Invoice?
So, how to get a commercial invoice?
A commercial invoice is not something that can make you worry much if you have no idea how to come up with one.
You can find a commercial invoice template of a trading company online. There are many samples online, and all you need to do is analyze them for your business.
You can also find templates that various shipping couriers provide. You can visit the official website of companies like FedEx and UPS.
Remember, a seller can customize the commercial invoice. You can visit related secure websites and services to check the invoice format.
With this, you can ask the seller to follow the standard format and customize it for your business.
Suggested reading: Customs clearance
What Details Should You Provide in Commercial Invoices?
An invoice is one of the most important documents required for customs purposes. Thus, one should treat it as a legal document to ease the transport of goods.
Given below is the information required in commercial invoices.
- Purpose of the Export
The invoice should specify more information regarding the export.
Explain the reason for export, i.e., why you are shipping goods. Are they for trade or a gift purpose?
- Shipping Date and Invoice Number
Here a shipping number indicates the carrier’s number. But for admin purposes, one can add invoice number and order number.
Remember, this is not a legal requirement or sensitive information.
- Merchandise Description
Make sure you correctly describe your merchandise in the shipments as it matters during export and international trade.
For example, you can mention the product type instead of your company product codes.If your shipments include a branded item, provide all the information regarding the brand.
For example, one can add a brand name, model number, price, hs code, etc.
Customs authorities check the HS code to classify goods in shipments.
- Quantity of Goods
If the seller is shipping different products to you in a small quantity, make sure he mentions the quantity of each in an appropriate measure.
For example, he can use volume for liquid items, pieces or units for parts, weight for goods. It is the correct way to mention quantity.
- Insurance Costs
A commercial invoice must include both freight and insurance costs separately. If the supplier adds these costs together, customs will calculate the total value.
- Gross Weight
Make sure the invoice has the gross weight and net weight of the package separately.
- HS Code
As mentioned earlier, this code provides more information about the type of goods available in the shipments.
Besides, this code also helps estimate customs duties.
- Declared Value
Here a buyer can ask the seller to mention the true value of the shipment. A true value indicates the market price of your products, i.e., a unit price.
Thus, customs officials might ask for evidence if the seller doesn’t include a reasonable value.
Suggested reading: China import tax
Suggested reading: Import Tax From China To US
How to Fill the Commercial Invoice?
A commercial invoice is an important document you need during international shipping. It gives the customs authorities the needed information.
In return, this helps them assess if the goods can move in or out of the country. It also helps them to determine taxes.
There are no specifics to follow regarding filling the commercial invoice matters.
Not even in creating one. It would help if you did not ignore, though, filling all the essential information.
A commercial invoice must include all the essential but crucial information. The invoice must include basic information like the transaction details.
Furthermore, Taxation ID, address details, and recipient’s details are vital.
The invoice needs to note something else about the sender or the recipient. That is if they are individuals (and not from a company).
Their tax ID should be their social security number. Or any equal government identification.
You need to ensure that the seller fills any columns that are not applicable for your shipment with ‘NA.’
You should not in any way leave them blank. You can ask the seller to print the invoice with the company’s letterhead.
Ensure that the information is in English. Whether, company’s details, like the address, contact details and tax number are there.
The invoice also needs to note down the reason behind sending the goods.
That should be if it’s for business or a gift. You can check out any pro forma invoice sample to better understand it.
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What Are the Standard Commercial Invoice Terms?
Make sure the seller does not omit some terms while filling a commercial invoice. A seller must write the invoice in English.
Would you want your seller to customize the commercial invoice? You can use a template and send it to the seller.
Here’s a description of standard terms.
- Intermediate Consignees: It is where a seller fills in the details of the person or company they are sending a package to or an intermediary.
- Invoice no.: It is your invoice number.
- Customer PO no.: It is your sale’s reference or order number.
- Payment Terms: This part will include the payment terms settled between the seller and you (e.g. payment within some specific days of receiving goods, direct deposit, etc.)
- Comments: This space has shipping information, delivery address instructions, or other notes.
- Value: It shows the price per product.
Thus, one should not ignore these important commercial invoice terms.
1. Can We Put a No Value/Zero Value in a Commercial Invoice?
You can use the name zero value/ no value only to get the sample commodity.
The trader cannot pay for the transit if a product gets shipped in as a specimen reference. One thing to note is that the invoice should include an endorsement.
The endorsement should state, ‘Goods supplied free of charge- value for customs only.’ There are a few instances when samples may attract a nominal value.
2. Are Commercial Invoice and Packing List the Same Thing?
A commercial invoice and packing list are essential documents used to export goods.
They help in filling the shipping bill and other important documents.It is a legal statement that shows evidence that a trade transaction happened.
That is between the importer and the exporter.
But, a packing list is a comprehensive description of goods that you need to ship for proceedings.
3. What Is a Commercial Invoice and Certificate of Origin?
These documents are crucial and are helpful when shipment processing is taking place.
A commercial invoice helps the authorities to understand the terms of the transaction.
In contrast, you can use a certificate of origin to indicate the exporter’s place. It is for appropriate testing and drafting of import duties for goods.
The exporter issues this certificate. It confirms and certifies the country of origin of its products.
Thus, it helps customs officials recognize the parties involved in the export. The Chamber of Commerce can stamp the document.
The commercial invoice supports the same by declaring the exact information.
4. Where Can I Use Commercial Invoice?
So, when do you need a commercial invoice?
A commercial invoice for customs clearance is a document that buyers and sellers use while shipping.
The paper describes their bought and sold items. The importer also uses it to release funds to the seller through the bank.
Thus, this document can share sensitive information. It also helps to ensure the shipping costs. An invoice is a vital supporting document.
That is if an insurance claim comes up on the shipment.
Customs authorities use the commercial invoice to access custom duties and inspection purposes.
5. What Happens When You Fill a Commercial Invoice Wrong?
Filling out incorrect information in a commercial invoice can result in delays or legal ramifications.
It also causes shipping delays. You can use the commercial invoice for customs clearances while shipping to EU countries or other parts.
Any incorrect info could result in incorrect payment of duties and taxes.
With this, you may encounter further legal implications. Also, people use commercial invoices for custom declarations purposes.
Any misinformation may lead to underpayment. It could also affect the correct amount of duties and taxes.
If you happen to be importing lots of goods from China, you need to create a template for your commercial invoices to avoid delays.
Send this template to your seller. This invoice is as important as export documents and export licenses.
It is something you need to consider. Ensure the seller fills in the necessary information.
With this, you will be of great help to the customs authorities.
Moreover, they won’t struggle to know the taxes and import duty that applies to your package.
You also never want to get to the wrong side of the law. Let the authorities know and understand the terms of the transaction.
You may also not like the idea of a delayed package, which can lead to shipping delay costs.
Follow the proper procedures. Familiarize yourself with the commercial invoice.
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