What should my export invoice look like?
Before you can export your goods to an international buyer, you must draft a commercial invoice to send with your shipment. A commercial invoice is the most common type of export invoice, and serves as proof that you (as the seller) and the buyer agreed on the selling price stipulated in the invoice. A commercial invoice is the final bill that the buyer and seller exchange before the goods can be delivered to the buyer.
Can I use my accounting invoice as a commercial invoice?
Commercial invoices (and other export invoices) are not the same as normal accounting invoices. While it is acceptable to use accounting invoices for internal record-keeping purposes, only export invoices are acceptable for export purposes. This is because export invoices contain additional information that various parties in the export transaction need. For example, Customs officials use commercial invoices to calculate the correct duties and taxes, and freight forwarders often require a commercial invoice to provide an accurate quotation. Import brokers, marine insurance companies, and banking institutions also use the information stipulated on commercial invoices.
Note: A pro-forma invoice is another type of export invoice. It is a statement from the seller that the seller will provide the goods stipulated on the invoice to the buyer. In other words, it serves as a preliminary invoice. Pro-forma invoices can be used by the buyer as a quotation, or to register for an import permit, raise finance, or confirm details that will appear on the final commercial invoice.
What information must I include in my commercial invoice?
Pro-forma and commercial invoices need to include the following information:
- The seller and buyer’s details (name, address, contact details). The seller and buyer are not always the same as the exporter and importer.
- The date and place where the goods were sold.
- A detailed description of the goods (including item names, price per unit, quality or grade, quantity, HS code, country of origin, value, currency, and any marks, numbers or symbols under which the goods are sold).
- The terms of trade (Incoterms).
- Terms of payment (including method of payment).
- Any ancillary costs (such as freight or insurance)*
- Shipment details (including the “ship to” party’s full name, address and contact information, the point of departure, and the destination country).
- Packing specifications (including the number and types of packages, individual package contents, marks and numbers, sizes, and weights).
- Any goods or services that the buyer provided to contribute to the production of the exported goods (e.g. raw materials, processing equipment, or contracted services).
- Any additional information (such as terms and conditions to the sale) can be listed on the commercial invoice, or on a separate “terms and conditions” document.
- The seller’s signature, name and title, and date of signing.
*If freight and insurance costs are included in the selling price. Some countries do not charge duties for ancillary costs. Customs must be able to clearly differentiate between dutiable and non-dutiable items when inspecting the commercial invoice.
Types of commercial invoices
Commercial export invoices may vary depending on the country you choose to export to. Import Customs requirements differ from country to country, and because export invoice documentation is particularly important to Customs authorities, it is best to find out which format your export destination country prefers.
Apart from the pro-forma invoice, there are five other types of commercial export invoices:
1) Standard commercial invoice
Standard commercial invoices are the most common type. You can use them when the importing country or clearing agent does not stipulate any special requirements. Simply use your company’s standard commercial invoice template (remember to include all the above-mentioned information). You may make the invoice out as zero-rated for VAT purposes if required.
2) Commercial invoice with a declaration
Importing countries often stipulate that the exporter must include a typed declaration on the commercial invoice. Wording and language requirements differ from country to country (often the importing country requires the declaration to be in their official language). The purpose of the declaration is to prove the origin of the goods, and to confirm that export prices are correct. The declaration helps to prevent fraud, because if the seller’s falsifies the declaration in order to “help” the buyer escape certain obligations, the seller is guilty of a punishable offence.
Below is an example of a typical declaration:
“We hereby guarantee that this is a true and correct invoice and that the goods referred to are of the origin, manufacture and production of South Africa”.
Alternatively, if applicable, you can use SADC, EUR.1 or MERCOSUR certificates of origin for your exporters declaration.
3) Commercial invoice with third party certification
Some governments require that a third party certify the above mentioned declaration and the invoice contents.
- Chamber of Commerce certification: In most cases, the Chamber of Commerce (CoC) is required to certify the invoice. This means that the CoC must stamp the invoice with their official stamp. This certification serves as proof that the invoice signatory is authorised by the seller to make the declaration on behalf of the seller. Companies that export frequently can submit their internally approved invoice signatories’ signatures with the CoC for this purpose.
- Embassy certification: Some governments require invoices for import to be certified by the commercial section of their local embassy (i.e. the importing country’s embassy). The exporter has to obtain this certification in their own country (the country of export).
If you require both CoC and embassy certification, you can first arrange for certification at the CoC and then forward the certified documents to the relevant embassy. Sometimes the CoC may even forward the documents to the embassy on your behalf.
4) Consular invoice
Some countries require exporters to complete a country-specific consular invoice. The exporter must submit this invoice to the consulate for legalisation.
Formats for consular invoices vary considerably, and very often they are printed in the import country’s language.
Note: Consular fees can also be high (at times even a percentage of the invoice value). You may display consular fees as a separate line item on your pro-forma invoice so that they buyer is aware that they will need to cover the costs.
5) Specific Customs invoice
Some countries require specific Custom’s invoices (either instead of the standard commercial invoice, or in addition to one). The exporter must usually complete the Custom’s invoice on a specified form.
Countries that formed part of the Commonwealth frequently require Custom’s invoices, but they are being phased out. You can obtain Custom’s invoices from specialised printers.
What should my commercial invoice look like?
As long as your standard commercial invoice contains all the necessary information, the layout is largely your choice. You can also choose to include your company logo or letterhead.
Figure 1 below is an example of a standard commercial invoice. You may also download an easy-to-use template here.