Guide · International
Commercial invoice: what it is and when you need one
When goods cross a border, customs wants to know what is in the shipment and what it is worth. The commercial invoice is that declaration and the bill for the sale in one document.
What a commercial invoice is
A commercial invoice is the document an exporter prepares for an international shipment. It describes the goods, states the price and the terms of sale, and gives customs the value it needs to classify the goods, assess duty and release the shipment. It usually serves as the sales invoice as well.
It is different from a proforma invoice, which is sent before the sale is final, and from a packing list, which says what is in each box but not what it is worth. Many shipments travel with all three.
Commercial invoice vs proforma vs packing list
| Document | What it does | Shows prices? |
|---|---|---|
| Proforma invoice | Confirms the order and its terms before shipment | Yes, as an offer |
| Commercial invoice | Declares the final value to customs and bills the buyer | Yes |
| Packing list | Lists cartons, quantities and weights for the carrier | Usually no |
What goes on a commercial invoice
- The exporter and importer legal names, addresses and contact details.
- An invoice number and date, from the export invoice series.
- The terms of sale, such as DAP, DDP or FOB, and the named place.
- A plain description of the goods: what they are, what they are made of, and what they are for.
- The HS code for each product line, agreed with your broker.
- The country of origin for each line.
- Quantity, unit of measure, unit value and line total.
- The currency and the total invoice value, written in words if your broker asks.
- Freight, insurance and other charges, itemised rather than folded into the unit price.
- The reason for export: sale, sample, gift, return or repair.
- Reference numbers the buyer will recognise: purchase order, proforma number, shipment or booking number.
A worked example
A US studio ships 200 ceramic mugs to a UK retailer at $18 each, with $450 freight and $60 insurance, on DAP terms. The commercial invoice values the goods at $3,600 and shows the freight and insurance separately.
| Line | Amount |
|---|---|
| Ceramic mug, stoneware (HS 6912.00), 200 × $18.00 | $3,600.00 |
| Freight to Manchester | $450.00 |
| Insurance | $60.00 |
| Total invoice value (USD) | $4,110.00 |
The UK importer pays import VAT and any duty through its broker. On DAP terms the seller delivers to the named place and the buyer clears import; on DDP terms the seller pays duty and needs the importer details to do it. The invoice has to say which one applies.
Terms of sale matter as much as the price
Incoterms decide who pays freight, insurance and duty, and where risk passes. DAP leaves import clearance with the buyer; DDP puts it on the seller; FOB puts the goods on the vessel in the seller’s account. If the term on the invoice disagrees with the bill of lading or the packing list, the shipment can sit while the broker queries it.
Pick the term with your forwarder before you quote, print it on the invoice, and keep it the same across the commercial invoice, the packing list and the shipping instructions.
Mistakes that delay clearance
- Undervaluing the goods to reduce duty. Customs can revalue the shipment, charge the difference and fine the importer.
- Vague descriptions such as “gift”, “samples” or “parts”. Customs needs to know what the item is and what it is made of.
- Missing or guessed HS codes. Ask the broker; a wrong code changes the duty rate.
- A currency that is not stated, or a total that does not match the line items.
- Quantities that do not match the packing list or the bill of lading.
- No country of origin, which some destinations require to apply the right tariff.
- Freight and insurance folded into the unit price, so the customs value cannot be checked.
How to prepare one
- Get the importer of record details: legal name, address, VAT or EORI number if the destination uses one.
- Confirm the Incoterms and the named place with the buyer and the forwarder.
- Classify each product with an HS code. Your broker will do this if you send photos and material details.
- Value the goods at the transaction price, then add freight and insurance only where the term says they belong in the customs value.
- Check every quantity against the packing list before you sign.
- Send a PDF with the shipment documents and keep a copy with the export record.
The commercial invoice template lays out the HS code, origin and Incoterms fields for print or Word.
Does it replace the sales invoice?
Often, yes: for an export sale the commercial invoice is the invoice the buyer pays against. It still needs the payment terms and the bank details you would put on any invoice. For domestic sales, a normal invoice is enough; the commercial invoice only becomes necessary when the goods leave the country.
US sales tax generally does not apply to goods exported for use outside the country, but the exemption has conditions and you need proof of export. Keep the shipping documents with the invoice and ask an accountant about your state.
Questions people ask
Who prepares the commercial invoice?
The exporter, or the freight forwarder on the exporter’s behalf. The importer’s broker uses it, but the seller is responsible for the accuracy of the values and descriptions.
Does it need a signature or stamp?
Many brokers and destinations expect a signature or company stamp; some accept an unsigned PDF. Ask your forwarder what the destination requires, and sign it if there is any doubt.
Can I send a proforma instead?
No. A proforma is an offer or an estimate; customs needs the final commercial invoice that matches the goods actually shipped. If the shipment changed after the proforma, issue a commercial invoice with the real quantities and values.
Is a commercial invoice the same as a customs invoice?
In practice, yes. Some countries and carriers use the name “customs invoice” for the same document. The fields are the same: goods, value, origin, terms and parties.
This is general information, not customs or tax advice. Rules and thresholds depend on the destination and the product; confirm the details with your broker.
Related
Proforma invoice vs invoice
Confirm an order, then bill for it.
Invoicing international clients
Currency, wires, tax notes and the details to include.
Invoice numbering
Sequences that hold up when a client or auditor checks.