Last editedOct 20212 min read
Without invoices (either physical or digital) there would be no verifiable proof of purchase or payment, and finance and accounting departments in businesses around the world would be thrown into chaos. They are particularly crucial when it comes to international shipping, where they are referred to as commercial invoices.
So, why is there still confusion surrounding the documents required to ensure all products and services arrive on time and all sellers get paid promptly? Here, we’ll explain not only what a commercial invoice is, but how you can create your own.
What is a commercial invoice?
A commercial invoice for shipping refers to the export documents that contain all the relevant information about the goods you’re intending to ship. It’s used to create a customs declaration and get your goods onto a ship (or plane) and onwards to their final destination.
What does a commercial invoice do?
If the commercial invoice has been properly completed it will give customs officials all the information they need to decide what taxes and tariffs to apply. This keeps everything moving more smoothly and leads to fewer delays. Once officials have judged whether or not your goods and packaging meet requirements they will be shipped.
Do I need a commercial invoice?
Goods being shipped within the EU don’t require a commercial invoice, although since the UK left the EU all its exports going into the EU now require one, alongside a customs declaration, dispatch note and certificate of origin. There are certain exceptions such as shipments to Liechtenstein and San Marino, but generally speaking, if the country is outside the EU you will need to complete a commercial invoice.
Commercial invoice template
Here, we’ll go through exactly what is required in a commercial invoice to ensure you avoid any issues or delays and that your international shipments arrive in a timely and safe fashion, regardless of the size of your enterprise.
Your personal or business address, and the personal or business address of the receiver so it’s clear where the goods are leaving from and where they are supposed to be going.
The tariff code, which is the number used to classify and identify your goods. You will need to use the official UK Government website to look up your tariff (or commodity) codes as well as duty and VAT rates.
More specific information, including your reason for exporting the goods (most likely for sale), the value of the goods and the relevant currency. This will show not only what the goods are worth but what their value will be in the destination country.
The terms of the delivery – i.e. who is actually paying for the shipment and the taxes applied to it.
A VAT number and EORI number. All registered businesses have these and if you’re not aware of yours then you need to contact HMRC. These numbers are used to identify you as an international trader and are arguably the most important part of the invoice for shipping purposes.
A signature that confirms the information included within the document is correct.
Note that all commercial invoices must be in English.
A DHL commercial invoice or a UPS commercial invoice doesn’t need to be a physical piece of paper anymore. If you ship using these carriers you are free to use paperless trade, sending all customs forms digitally. This not only cuts down significantly on administrative costs but on time too.
We Can Help
If you’re interested in finding out more about certified public accountants, or any other aspect of your business finances, then get in touch with our financial experts at GoCardless. Find out how GoCardless can help you with ad hoc payments or recurring payments.