Commercial invoices are important especially in tracking items that are shipped to or from a great distance, such as in import and export sales transactions. One key feature of a commercial invoice is that it contains a tracking number, which makes it easy to monitor while in transit as well as helps the recipient to claim for an insurance in case the package is lost.
Hence, it is important that every business transaction must have a commercial invoice to protect both the seller and the buyer. More on commercial invoice discussions as well as templates and examples are presented in this article. These might help you in your commercial invoice needs.
The following are the important elements that must be contained in a commercial invoice.
1. The parties’ complete information: The complete information of the buyer as well as the seller must be present in a face of a commercial invoice. And by complete, this means that the name, address, and contact details of the buyer and seller must be written on the invoice.
2. Terms and conditions: The terms and conditions regarding the transaction must be clearly specified in the commercial invoice. The terms must be simple and direct, and it must be concise enough in order to avoid misunderstanding between the parties.
3. List and description of the items: The names and descriptions of all the items in the transaction must also be included such as the quantity, weight, and volume of the shipped items.
4. The value or cost of the items: The value or cost of the items must also be specified. It must be the per unit and total cost. This information might be helpful for insurance purposes.You may also see billing invoice examples.
5. Charges and fees: The buyer must also be informed of the charges and fees, so it must be included in the invoice. These charges may include freight charges and insurances charges in case of fortuitous events.
6. Number of items: In order for the recipient to check the completeness of the package, the number of items must be clearly specified for reference.
7. Tariffs: Because commercial invoice are normally issued for import and export sales, a corresponding tariff or tax for the items being shipped must be paid. Hence, this must be specified in the invoice.
8. Invoice number: Similar to all other business invoices, a commercial invoice must have a unique identification number or order number so it would be easy for the two parties, the buyer and the seller, to keep track of the items in transit.
9. Signature of the shipper and date: To ensure that the shipment was indeed made by the selling party, the shipper must sign the invoice. The date must also be indicated.
10. Other information: This includes import license requirements, additional certifications and statements required by the buyer’s country, and relevant law.
Creating an invoice is especially important when you own a business. To help you create an invoice with ease, here are some steps and tips that you can follow:
Google Docs provides downloadable templates as well as lets you create your own invoice from scratch.
MS Word can provide you a presentable commercial invoice when you just know how to use the software. Here are the simple steps that you can follow:
You can also utilize MS Excel in creating a commercial invoice. Don’t know how to start? Here are the simple steps:
Basically, this is the standard generic invoice that any type of business could use. Normally, invoice of this type can be filled out whether you are selling a product or a service provider.
For transactions that do not involved one-time payment such as franchise, long-term construction contracts, and other special cases of sale, a progress commercial invoice is the perfect invoice that must be issued. The progress invoice reflects the accounts payable by the customer which is the counterpart of the accounts receivable on the part of the seller. It also presents the percentage of completion and the estimated remaining time of completion of the project. It also keeps track of the expenses of service provider in case of service transactions.
This invoice pertains to the utilities that are being consumed by the customer such as electric bills, internet bills, water bills, among others. Presented in this invoice is the due date of the bill, the utility consumed by the customer, as well as the penalties, fees, and other charges.
In this type of invoice, the nature of transaction is recurring and the price is usually fixed, for example, rental of a room, office, or studio. The amount indicated in the invoice is similar all throughout. You may also see blank invoice examples.
This serves as a reminder or note for a previous transaction that has not yet been paid or is partially paid by the buyer. There are cases that the remaining balance of the previous invoice is appended or added to the next invoice.
The following are the common sizes of a commercial invoice.
What is the importance of a commercial invoice?
Commercial invoice is important because it allows the seller and the buyer to keep track of their sales and purchases, respectively. This is also important as it is mandated by law for tax purposes. Moreover, it prevents the exchange of illegal products, and it clarifies and describes the items on the transaction.
What is the difference between invoice and receipt?
Invoice and receipt are among the common terms that you encounter in a sales transaction. Some may get confused between the two as both of them are papers related to the sale. However, the main difference between the two lies in the time when they are issued. The invoice is issued prior to the transaction while the receipt is issued after the transaction, that is when the transaction has been completed. Moreover, the invoice is primarily used for tracking and monitoring, while the receipt acts as a documentation of the transaction.
What is the difference between invoice and purchase order?
A purchase order is sent from the buyer to the seller requesting the order of goods, while the invoice is sent from the seller to the buyer confirming the buyer of the transaction and notifying the buyer that the payment is due. Hence, the purchase order defines the terms of the sale, while the invoice confirms that the sale occurred. So, the purchase order is sent before the invoice.
When do you issue an invoice?
An invoice is issued prior to the completion of the sales transaction. Because an invoice also serves as a reminder to the customer for an amount due, it is issued before the receipt. Receipts are only issued after the payment or the completion of the transaction, as stated above. So basically, the process is as follows: the buyer will send a purchase order to the seller, the seller will confirm it through an invoice, and when the customer pays the amount stated on the invoice, the seller will then issue the receipt.
Do documents shipped internationally require a commercial invoice?
Generally, documents are regarded as a form of communication with no commercial value. In shipping a document internationally, you only need a UPS shipping label. Hence, an invoice is not required.