2018-11-13 16:45:40InvoicingEnglishRead about the Canada Customs Invoice and understand why exporters need to use these or create their own commercial invoices.https://quickbooks.intuit.com/ca/resources/ca_qrc/uploads/2018/11/commercial-shipping-invoices.jpghttps://quickbooks.intuit.com/ca/resources/invoicing/commercial-invoices/5 Things You Need to Know About Commercial Invoice | QuickBooks

5 Things You Need to Know About Commercial Invoices

6 min read

When you’re shipping goods across international borders, you should issue a commercial invoice. This serves as a customs document and contains more information than a traditional invoice does. Depending upon where you’re shipping goods, your commercial invoice may require specific details. Here are the essentials you need to know.

What Is a Commercial Invoice?

A commercial invoice is an invoice that you include when you’re shipping goods to other countries.

In many cases, companies uses the Canada Customs Invoice or CCI, a special invoice designed by the government, when shipping goods abroad. The seller uses the Canada Customs Invoice to bill for goods, and the buyer uses this same invoice to pay for those goods. Although a Canada Customs Invoice differs from a commercial invoice, with the addition of the proper details you can create your own personalized commercial invoice to use in place of a more generic Canada Customs Invoice.

Commercial Invoices vs Other Types of Invoices

All invoices are intended to provide records of business transactions. They instruct the buyers regarding how much they owe, providing options for paying the bill, so they help the seller collect payments. Commercial invoices have a greater purpose. Generally, the destination country reviews a commercial invoice before allowing the shipment into the country. In addition to this, if anything is lost or broken in transit, the invoice can be a crucial supporting document for resultant insurance claims. Sometimes a buyer puts funds into an escrow account until a shipment is received, then they show the commercial invoice to their bank to have the funds released for payment.

To understand the unique features of a commercial invoice, compare it to other popular invoices:

Standard invoice — Basic invoice which contains an invoice number and critical information about the buyer and seller. These also contain an itemized description of the products or services, prices, payment terms, and due dates.

Progress invoice — Often used in the construction industry, these are incremental invoices that detail the progress of long-term projects and let customers know how much they currently owe.

Timesheets — Invoices utilized by independent contractors such as consultants, lawyers, and tutors who charge on an hourly basis. As the name suggests, these track the time spent on projects for billing purposes.

Utility invoice — A type of invoice which is specifically used by utility companies including electricity, water and sewage companies, as well as telephone and internet providers. These invoices note such things as the billing period and previous payments submitted in addition to any past due balances.

Recurring invoices — When you need to generate the same invoice for a customer every month, it is best to use a recurring invoice. These invoices are most often used when you lease or rent equipment to customers, or for services you provide on an ongoing basis.

Pro-forma invoice — Similar to an estimate or a quote, the pro-forma invoice gives your buyer an estimate of the costs of products or services they’re purchasing. Generally speaking, you don’t record these invoices in your accounts receivables because they’re usually used for quotes, so the numbers aren’t permanent.

Purchase order — A purchase order contains details similar to those found on an invoice, but it’s issued by a buyer to serve as an offer to the seller.

There are also other types of invoices such as debit and credit memos, mixed invoices, and withholding tax invoices. Each of these invoices also plays a specific role for your small business.

To view a sample invoice, and for details about exporting goods, visit the Canada Border Services Agency site for guides and FAQs. If you have additional questions about the requirements, contact the automated telephone line of the Border Information Service.

What Information Should Be on a Commercial Invoice?

If you want your commercial invoice to take the place of a Canada Customs Invoice, it must have the following information:

  • Your full name, address, and country
  • Your customer’s full name, address, and country
  • Details about the goods being shipped
  • Net weight – the weight of the goods without packaging
  • Gross weight – the weight of goods after packaging
  • Unit price in the currency of payment (also called settlement)
  • Delivery and payment terms
  • Date the goods went into transit
  • Purchase order number and other reference numbers
  • Importer’s licence information if relevant
  • Freight charges
  • Any shipping insurance details

You may also want to include an invoice number, the date your document was issued, quantities, the total price, and discounts. Additional shipping details such as the port of entry, shipping date, and the mode of transport being used (road, rail, ocean freight, plane, etc.) are also helpful.

How Do You Make a Commercial Invoice?

To create your own commercial invoice, follow these steps:

  1. Draft a list of the items you want to include on your commercial invoice.
  2. Make sure the details satisfy the requirements of the Canada Customs Invoice.
  3. Confer with your customer to see if they want to add any additional details, and go over the terms you and your customer have agreed on. This ensures that everything is included on the invoice.
  4. Check to see whether the destination country has any special requirements.
  5. Fill out an invoice template and add details as needed to transform it into a commercial invoice.
  6. If desired, translate the invoice into the national language of the destination country but also remember to include a copy of the commercial invoice in your own language.
  7. Compare the details on the commercial invoice with any other documents such as Letters of Credit or customs forms, and make sure everything matches.
  8. Double-check the details of the invoice with the contents of your shipment, correcting any errors found.
  9. Print out two copies of the commercial invoice, and pack one copy inside the shipment. Place the other copy in a clear pouch or envelope attached to the outside of the package.
  10. Ship your package.

Commercial Invoice Templates

If you export a lot of goods, creating a template for your commercial invoices will save time by allowing you to quickly and easily adjust the details for each shipment. You can find free templates online at the Canada Border Services Agency, which has a free downloadable Canada Customs Invoice to use as a commercial invoice. Simply download the PDF, then type in the required information and print when you’re finished, or print blank copies to fill out by hand. You can also add the list of required details from the Canada Border Services Agency website to your favourite invoice template in order to create your own uniquely branded commercial invoice.

There are also templates available through Microsoft Excel, an option that offers the flexibility to add your logo or other images. Excel also allows you to input formulas that calculate total price based on per unit prices and number of units. With Excel, you must manually perform all of the actions that Quickbooks automates for you.

To streamline the process of creating commercial invoices, use QuickBooks Online. QuickBooks enables you to do everything Excel does, but it also offers the option to easily and seamlessly send a copy of your invoices to clients electronically. Then you just print copies to pack and send with your shipments. When you generate the invoice, your accounting records are updated accordingly, and you can even set up reminders and alerts to let you know when customers make payments or miss due dates. With custom templates and auto payment, QuickBooks invoicing makes getting paid easy.

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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