What is a Commercial Invoice

A commercial invoice, simply put is a document that is used in international trade. If you ask the question “What is a commercial invoice” then what it looks like will be similar to the picture on the left. When you are trying to explain what is a commercial invoice to someone, the first distinction you need to make is that it is not simply a bill of sale, as most domestic invoices are.

Whether you run a business, work in a sales office or have simply been involved in buying goods, you will have been given a written record of the item and the amount that should be paid. Companies differ on how they produce their invoices and there is no specific ruling as to what information should be contained in an ordinary invoice. When it comes to the question of what is a commercial invoice, it is not quite as simple. Although a commercial invoice may be similar in form to an ordinary invoice, it is used as a bill of declaration for international customs officers, rather than simply a bill of sale. Another area where the question of what is a commercial invoice is important is on the information that has to be included. There are specific items of information that need to be added to a commercial invoice for it to be viable documentation.

Commercial invoices in a nutshell

The simple answer to what is a commercial invoice is that it is probably one of the most important documents necessary to international trade. Commercial invoices are used by exporters who are shipping their goods to sell them in another country. The invoice must contain the name of the exporter and of the shipping company, a commercial invoice also needs to describe the product being shipped and give its country of manufacture. International trade is governed by the World Trade Organisation and goods that are being shipped abroad have to have certain internationally recognised sets of digits, as laid out by the World Customs Organisation. A commercial invoice also needs to state where the goods are being shipped to and the price of those goods.

One thing that is essential to remember when trying to answer the question what is a commercial invoice, is that unless your goods are shipped together with a copy of the invoice containing the information outlined above, the shipment will not be allowed into the country it was destined for. Customs personnel use the information on a commercial invoice to calculate the tariff or duty on imported goods. You need to have two copies of a commercial invoice, one of which is loaded with the shipment and a second copy of the invoice that has to be attached to the Bill of Lading. Commercial invoices need to be authenticated, i.e., agreed that the information on the invoice is correct and then signed. If you want to export goods then knowing about commercial invoices and their importance is vital because you can't engage in international trade without one. A final thing to bear in mind when considering what is a commercial invoice is that the document is a way for countries to regulate foreign trade rather than allowing a free for all.