What Is A Commercial Invoice For Shipping?
If you’re an e-commerce importer or exporter, you’re probably already well aware of the online shopping boom. E-commerce sales are skyrocketing and with many SMBs looking to save money by sourcing goods overseas, demand for shipping capacity from Asia to Europe and North America is exploding.
When shipping domestically, you don’t need to be familiar with a lot of the documentation required for international freight.
But if you plan on expanding your business and shipping internationally, then you’re going to need to understand commercial invoices.
A commercial invoice is a crucial document that details all the relevant information about the shipment’s price, value, and quantity of goods.
This will in turn determine the taxes and duties that you’ll need to pay for your shipment to clear customs.
US Customs Complexity
Importing goods from overseas often means lower product costs, but it also means handling more paperwork.
Especially if you’re importing goods from Asia to the United States, keeping up with customs is vital to your business’ bottom line – and this means submitting an accurate and complete commercial invoice.
We surveyed importers and exporters on Freightos.com and found that 17% of them listed dealing with customs as their biggest pain point when shipping. When we followed up on this and asked our customer success team about it, they reported that at least half of the questions they get have to do with customs.
This is why we’re going to demystify US customs and help you book your next shipment with confidence.
The first thing you need to know about is the commercial invoice.
Get your all-in freight quote including US customs
Getting Your Commercial Invoice For US Customs Done Right
For importers to the US, the most important thing to keep customs under control is commercial invoice requirements.
While you can provide a proper invoice, it’s still recommended to work with a customs broker who can make sure all the t’s are crossed and advise you on anything else required for customs clearance.
Providing accurate information to your customs broker and on your commercial invoice will likely mean reaching out to your supplier. Since your supplier might not have the same urgency that you do, give yourself enough time to get what you need before shipping.
Once your supplier has given you any necessary information, you’ll be able to create your commercial invoice. This is the most important part of US customs, so getting it right is vital.
How to Fill Out a Commercial Invoice
You’re ready to ship your goods and get them sold, but first you’ll need to prepare your shipment for customs clearance by creating an accurate commercial invoice.
Here’s what you need to include on your commercial invoice to keep your goods moving and avoid unnecessary charges:
1. Include a coherent and accurate item description (in English).
The item description should match the product listed on the invoice and should also match the product’s HS code.
(More on HS codes in a minute.)
For many suppliers, English is not their first language so relying on them for the item description isn’t advisable. When importing to the US, check the item description on your commercial to ensure that it is accurate and understandable to customs agents.
Even if the description is correct and matches the items being shipped, these must also be reflected in the product’s classification.
2. Get your HS code double checked.
Overseas suppliers will often give you an HS classification code for your goods, but these aren’t always correct. When filling out a commercial invoice, ask your customs broker to verify that your product is properly classified. Mistakes could lead to delays and additional charges at US customs.
There are tools online that can help you figure out a product’s HS code, but it’s always advisable to speak to a certified customs broker about the proper classification.
Ready to check your HS code? Try our handy HS code calculator.
3. Ensure that you have the country of origin clearly marked on the commercial invoice.
Sometimes you may be shipping from a different country than where the goods were originally made. In the commercial invoice, it’s important to list the country of origin where the goods were manufactured and not where they are being shipped from.
This will also include detailing the currency of the sale.
4. Don’t forget the basics.
It might sound silly, but silly mistakes can be very costly.
When filling out your commercial invoice for US customs, make sure to list yourself and include your tax ID. A licensed customs broker will be able to look over your commercial invoice and point to where information is missing or verify the classification of your goods, but giving accurate details is the responsibility of the importer.
US Customs Commercial Invoice Template
A Commercial Invoice is a proof of sale. When booking freight on Freightos.com, you will likely use a Commercial Invoice template provided by your supplier. This template for US Customs purposes will include:
- Buyer and Seller details.
- Consignee (ie, to whom and where the shipment will be delivered).
- Details of notifying parties, including customs agents.
- A description of the goods
- HS code of the goods being shipped.
- The value of the goods that will determine customs duties.
Still have questions about US customs?
Check out our recent webinar with Adam Lewis, co-founder and president of ClearIt, an online customs brokerage platform integrated with Freightos.com.