Commercial invoice – There are a number of documents required for international shipping from the UK. Commercial invoices are one of the most important to understand, and to get right. Failure to do so can mean delays to your shipments. Or even seizures at customs. Luckily, with a bit of research and care, you’ll be filling out your commercial invoices like a seasoned pro in no time at all.
All non-EU deliveries from the UK need a complete commercial invoice. Alongside preventing problems with your shipment arriving successfully, it is a legal requirement to fill out and supply a commercial invoice correctly.
In this article we explain what a commercial invoice is, why you need it and how to fill it out.
Before we start… A little gift for you: our free guide for international shipping! 10 useful tips to ship abroad without any hassle.
In this article, we will answer the following questions:
- What is a commercial invoice and what is it used for?
- How to create your commercial invoice using our free template
- How to fill in a commercial invoice
- Describing the contents of your shipment: including description of the article, number, weight, and value
- Including HS code or commodity codes on your commercial invoice
- The country of origin of your goods
- The International Commercial Terms or Incoterms
- The differences between a commercial invoice and the CN22 / CN23 forms
- CN22 and CN23 Customs Declaration Forms
- The commercial invoice
- Paperless Trade for shipments from the UK with DHL Express or UPS
- Adding the commercial invoice to your shipment
- Glossary for completing your Commercial Invoice
Commercial invoices provide important information about the package that is being sent from the UK. By supplying correct information you help ensure your package arrives safely and on time. The commercial invoice, when completed correctly, helps customs officials to:
- Understand the contents of the package you’re sending from the UK.
- Decide which duties and taxes apply.
- Make sure your package meets all legal and compliance requisites.
- Make sure your package does not contain any dangerous or banned items.
At present, UK vendors are not required to supply a commercial invoice to send packages within the EU. Following the EU exit, or Brexit as it is more commonly known, these parameters are likely to change. Following Brexit, UK vendors will probably need to supply a commercial invoice for sending packages from the UK to the EU. Keep checking our Brexit blog for more information as it comes to light.
Some international shipments that are destined outside the EU require a customs declaration (CN22 or CN23), a CP71 dispatch note, and possibly a Certificate of Origin (CO). In this article we will cover how to create your commercial invoice for international shipping.
Offering international shipping is a great way for UK e-commerce retailers to grow their business and explore new markets. Making sure your shipping provision is the best standard possible is vital to your success. Failed or delayed shipments have a highly negative impact on your business. Taking time to get your paperwork right helps reduce the possibility of issues at customs and delays with deliveries.
At Sendcloud we want to help you optimise your e-commerce business and grow your customer base. Our handy template will help you fill out your commercial invoice correctly, first time and every time. By using this template you can make sure that your invoice meets all the current requirements and that the details have been completed correctly. Simply fill in all the details of your commercial invoice and download your ready-made, complete commercial invoice in PDF format.
So, what needs to be included on a commercial invoice? While there is no standard format, the document must contain several fixed elements. This includes details about the parties involved in the shipment and information about the goods. Below you can see an illustration of the most difficult parts of the commercial invoice. Below that, you will find an explanatory glossary.
Please note: Always write a commercial invoice in English.
Describing the contents of your shipment: including description of the article, number, weight, and value
While this might seem obvious, providing a detailed and correct description of the contents on your commercial invoice is vital. Doing so gives customs authorities a clear overview of what you are shipping and helps prevent delays or even fines. The description must include:
- Information about what you are sending.
- What the article(s) are made of.
- And, if relevant, what their purpose is.
Each item must be listed separately. The packages are often scanned by customs. If the officers see something that doesn’t match the description you could be fined. Therefore, it is very important to do this accurately.
Your invoice must also state the number of items, the total weight, and the total value in euros of the contents of your package. The value must be determined accurately. And remember, even a sample, gift or return shipment has a value.
Every item you include on your commercial invoice must have an HS code or commodity code. This international coding system – the Harmonised System (HS codes) – aims to classify goods in a standardised way. This helps customs authorities know which taxes, excise duties and controls apply to your package. It is crucial that you include the right code as it determines the number of import duties or other taxes you must pay.
For merchants who are new to the HS system, it can be tricky. However, there are a number of ways to find your product’s code. If you can’t find the code, you can look it up using our HS code finder. Or, go to trade tariffs on the customs administration website and click on the ‘Nomenclature’ tab. If you’re still stuck, no problem. Take a look at our manual on looking up commodity codes for more options. If you’re still struggling, contact the tax and customs agency in your country for more information.
You need to state where your products are produced in the section labeled ‘country of origin’. This is because there are countries outside the EU that request this document for trade policy measures. This may be needed after Brexit for UK merchants who ship to EU countries as well.
Incoterms (the International Commercial Terms) are standardised international agreements on the transport of goods. The Incoterms determine:
- Which party member is responsible for the shipping, insurance, import and customs costs of the shipment.
- Who should arrange the transport and to where.
- Who is responsible for the goods at each phase of the shipment, including the transfer point where the risk and costs of delivery change from the seller to the buyer.
You must check whether the carrier you work with also supports your chosen Incoterms.
Every decade, the Incoterms are updated. This means that they were just updated in 2020. The 2010 Incoterms still remain valid, but more and more companies will switch to the 2020 Incoterms. Read our update about the 2020 Incoterms here (as well as our complete guide on how to use them). The most common Incoterms are EWX (Ex Works), FOB (Free on Board), CFR (Cost & Freight), DAP (Delivered At Place) and DDP (Delivered Duty Paid). If you are unsure which Incoterm you should use, DAP is a good choice to start with, especially for e-commerce retailers. DAP means that you as the seller pay the shipping costs, arrange the insurance and prepare the export documents. Your customer will then pay any import and customs duties.
When shipping a package outside the UK, you often need several documents. Many UK e-commerce retailers are confused about the difference between the commercial invoice and the CN22 and CN23 documents we talked about before. If this is you, then please don’t worry. There are a number of similarities between the forms. Both forms provide customs authorities with information about the goods entering and leaving a country. On closer inspection, however, these two forms aren’t really all that similar. So, while it is easy to mix them up, it’s important that you don’t.
So what exactly is the difference between the commercial invoice and the CN22 and CN23 customs declaration forms? First, let’s briefly discuss what each document involves:
The CN22 or CN23 forms are used for shipments sent using a postal company. They are a mandatory customs form that needs to be added to shipments outside of the EU. The cost and weight of the package decides whether you need to use a CN22 or a CN23 form (you will only need one or the other, never both). The form includes information on the products that are being shipped, and this is used to determine what tax or other fees need to be paid. A CN23 form is always accompanied by a CP71 dispatch note.
You also need to add a commercial invoice to all commercial shipments that our outside the EU. It is a binding customs document containing primarily information about the package’s contents and the Incoterms (so the determined agreements). This includes who pays the customs costs. The commercial authorities are then able to determine whether there is a need for import duties on the goods being shipped based on the information on the commercial invoice.
You need to complete more information when filling out a CN22 or CN23 than for the commercial invoice, but the purpose behind all the forms is the same. All of these documents detail the information about what the package contains, meaning the customs authorities can decide whether the parcel can enter the country, and who is responsible for which taxes and import duties.
You’re probably now wondering when you need to use a CN22 or CN23 form, and when you need to use a commercial invoice.
- If you are using a postal service like Royal Mail when you send a package to a country outside the EU, then you will need to use use the CN22 or CN23 customs form. The CN22 or CN23 document is used by the Universal Postal Union so it’s mandatory for postal services. But you also need to add a commercial invoice to these kinds of shipments too.
- When shipping with a carrier like DHL or DPD instead of a postal service, you don’t need a CN22 or CN23 form.
This means that a commercial invoice is always required for all e-commerce shipments, whereas a CN22 or CN23 is only needed with parcels sent via a postal service.
Top Tip: if you are unsure, or want to 100% avoid delays, then we recommend always adding both documents.
When you ship from the UK using DHL Express or UPS, you can use ‘Paperless Trade’. Choosing this process means that customs forms are sent to the carrier electronically. The customs forms are immediately forwarded when you process your international order. Paperless Trade is great for e-commerce retailers as it saves you time, printing and costs. It also reduces the risk of documents being lost. Sendcloud automatically uses Paperless Trade when you ship outside the EU using DHL Express or UPS.
Generally, three copies of the commercial invoice are required when shipping from the UK: one for the country you are exporting from, one for the country you are shipping to and one for the recipient. Make sure you place two of them in a packing list envelope on the outside of the package. Put the last commercial invoice inside the package for the recipient.
Your package also should meet the following requirements:
- The packaging for your shipment must be strong enough to survive a fall of 1.5 meters
- Fill the package with padding like bubble wrap or foam peanuts. Do not use newspapers or other print publications. Censorship rules may cause delays, or your package being returned or destroyed.
- Reinforce the corners of your box or package with tape.
Top Tip: Make sure to keep a copy of the customs documents (so the commercial invoice and CN22/23) for yourself. If there are any mistakes in the handling of the shipment, you can sometimes face high customs fees. Be prepared for anything and keep a copy.
We already mentioned that commercial invoices are always written in English. Whether you want to create your commercial invoice yourself or whether you use a template and don’t know what to fill in, find a description of the most common terms below:
- From: This is the person sending the package (so generally yourself – the seller).
- To: The name and address of the person or company you are sending the package to.
- Intermediate Consignee: If there is an intermediary (someone linking the process between the to and from) involved in the shipping process, then fill in the details of that person or company here.
- Date: The date the package is sent.
- Invoice Number: Your own invoice number.
- Customer PO No: The sale’s reference or order number.
- Currency Used: The currency used to fill in the document.
- Country of Origin: The country where your product comes from. In some cases, you must add a CO document.
- Reason for export: Make sure to tick everything that is applicable to your shipment.
- B/L/AWB No: The carrier is often responsible for preparing this document. It refers to the transport document that details the arrangements with the carrier.
- Final Destination: The package’s end destination.
- Export Route/Carrier: The shipping company you are working with or the route the package will take.
- Terms of Sale: Most commonly referred to as the Incoterms.
- Terms of Payment: The terms of the payment between the customer and the seller (e.g. payment within 30 days of receipt, direct deposit).
- Terms of Freight: Freight conditions (e.g. prepaid, collect). These terms and conditions can also be entered in the Terms of Sale or the Incoterms.
- No. of Packages: The amount of packages you are sending.
- Comments: This is a place for shipping or delivery instructions or notes.
- Contents: A description of the products being sent.
- HS Code: The HS code or commodity code.
- Value: The price for each product.
- Net Quantity: The total number of products.
- Weight KG: The total weight of the package.
- Freight: Report the shipping costs here if applicable.
- Insurance: If applicable, detail the insurance costs here.
- Date and signature: Your name, signature, and date. Your package probably won’t be sent if it doesn’t include your signature. So make sure to sign and date all your packages.
You’re now ready to start international shipping with Commercial Invoices!
Now we’ve covered everything to do with Commercial Invoices, you should be confident to start shipping internationally.
Commercial Invoices (along with many of the customs documentation) may seem difficult to get your head around to begin with. Just remember, their purpose is to help customs understand what you’re shipping, which duties and taxes need to be applied, and check the legal requirements. Remember, when you fill out your Commercial Invoice, make sure to describe your package’s contents accurately, include the correct HS code (s), state the country of origin of your products, include your chosen Incoterms, and attach a CN22 or CN23 if you’re shipping with a postal service. And if you get stuck on any part, then you can always return to this post and check in with our handy glossary!
If you want to know more about international shipping, then head on over to our blog for more great informational articles. Or feel free to check out our FREE International Shipping Whitepaper with our 10 top tips on how to improve your international shipping process. You wanna do more? You can try Sendcloud for free or schedule a demo with our e-commerce experts?