What is a Commercial Invoice?

A commercial invoice is different from many other invoices because it is an invoice that is used specifically to ship goods abroad. Not all commercial invoices will be in the same style as many companies like to produce them in house. Probably the most significant thing that differentiates a shipping invoice from other invoices is that it must contain specific pieces of information.
 
Any commercial invoice, no matter how it is formatted, must contain the names of both parties involved in the shipping arrangement, i.e. the name of the company that is exporting the goods and the name of the shipping company charged with the job. In addition to the names of the parties involved in a shipping transaction, the invoice also needs to specify the nature of the goods that are being shipped, including the country of their manufacture. The invoice is used in foreign or international trade, which refers to the import and export of currencies, goods and services as they are made across international barriers. Although the main difference between trading in your own country and trading across borders is not dramatically different, the practice of foreign trade is a lot more expensive because of the tariffs and time costs that are involved.
The harmonised system
 
All goods that are shipped abroad must what is known as harmonised system codes, which need to be stipulated on the commercial invoice. A harmonised system consists of a commodity or product description and also a coding system. The harmonised system is an international standard means of classifying products that are shipped from one country to another. The World Customs Organisation or WCO – an intergovernmental organisation - developed and maintains the system of names and numbers that are used to classify products both of the parties involved in the shipping process must use the required digits on the invoice. In addition to the above a commercial invoice needs to have a statement from the exporter stating that the invoice is correct and the document must be signed.
Shipping invoices
 
A commercial invoice needs to have all the above information in the correct form because shipping invoices is used as a declaration form to customs officers, who are responsible for controlling the flow of goods across their country's borders. The invoice needs to be correct because it is the exporter's declaration of the goods that he or she is shipping into a foreign country. The information on the shipping invoice is used as a basis for calculating the tariffs or import duties that are charged on the goods being shipped. Governments use tariffs to support the interests of a country's people by using a measure of control over trade with other nations. The duty that is charged on a system of goods is based on the tariff formula based on the harmonised system for classifying products as outlined above. Commercial invoices are different from other types of invoices because they are part of the means by which governments can have a world wide regulated trade structure while at the same time promoting free trade between nations.

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