How to fill out a commercial invoice

When it comes to international shipping, few documents are as important as the commercial invoice, which contains key information required for customs clearance.

But what exactly is a commercial invoice, and what information does it contain? What do you need to consider when completing the commercial invoice, and what are the possible consequences of not filling out this critical piece of customs documentation properly?

Let's take a deep dive into this document and explore how to give your shipment the best possibility for clearing customs smoothly.

What is a commercial invoice?

The commercial invoice is the primary documentation used for import control, valuation and duty determination when shipping internationally. It is required for all international shipments, except documents of no commercial value. Recognized worldwide, the commercial invoice contains a significant amount of key information about your shipment such as: who it’s from, where it’s going, what it is, how many there are, what it’s used for, what it’s made from and its value.

"The commercial invoice is like a passport for international shipments," says Karin Acree, UPS customs & trade compliance manager. "As with your passport, never leave home without a commercial invoice when shipping globally."

How to complete a commercial invoice

According to Russ Lawhorn, UPS customs brokerage compliance manager, “You should aim to be as comprehensive as possible when completing your commercial invoice.” Among other items, your UPS^® commercial invoice should include:

• The complete name, address, and other contact details, such as phone number and email, for the shipper and the consignee in case your broker or customs official needs to request more information. Nobody wants their shipment held up in customs unnecessarily.
• A complete and specific description of the item, or items, being shipped.
• The number of units, the unit value, and the total value of the shipment. "You have to provide quantities because some of the duties, when imported, are based on the quantities of the merchandise, not just the value," Lawhorn explains.
• The number of packages in your shipment, together with its total weight.
• The country of origin. This is where the goods were manufactured or assembled for each commodity, not the country you are shipping them from, if the two are different. "If you have an invoice that has several different commodities made from several countries, that will need to be denoted on the commercial invoice because different countries have their own applicable duty rates," Lawhorn notes.
• The Harmonized System code, if known. The HS code helps determine the applicable duties and identify any free trade agreements in place. Use the UPS Harmonized Tariff finder, or work with your UPS agent, to identify the most appropriate HS code for your shipment.
• The currency that the transaction is taking place in, whether U.S. dollars or local currency.
• Terms of sale, also known as Incoterms (International Commercial Terms), outlining the responsibility between the shipper and the consignee for costs such as insurance and duties. The Incoterms also specify the point at which ownership for the goods transitions to the recipient.
• A record of any licenses or warranties, if part of the transaction.

Take the time to get this information as accurate as you can. Remember, the commercial invoice is the primary document used for import control and duty determination. "When you think of anything that your taxes and fees are going to be calculated on, you want that to be as detailed as possible," Lawhorn advises.

Common mistakes when completing the commercial invoice

Shipper beware! Here are some things many shippers forget to fill out—or fill out improperly—on a commercial invoice.

Forgetting to indicate the country of origin (CO) for your goods—Keep in mind the country of origin is where the goods were made or assembled, not where they are being shipped from. For a shipment of shirts made in Honduras but shipped from the United States, the CO is Honduras. Getting the CO correct is important because it helps drive the duty determination and identify applicable free trade agreements.  

Forgetting to state currency of sale—Shippers may accurately complete the monetary value field in the commercial invoice but omit to supply the currency code, meaning it is not clear whether the shipment is valued in U.S. dollars or local currency. This can be a costly oversight. "The difference between the currencies could affect whether taxes and duties are calculated properly or not," Lawhorn says. Nobody wants to overpay on duties, since getting your money back from customs could take six months to a year.

Forgetting to denote shipment value—If there's no stated value on the commercial invoice, this can trigger a hold on the shipment. Be aware the total shipment value is based on the actual purchase price between shipper and consignee—the price paid for the merchandise after any discounts or rebates.

These common oversights can result in inconvenient holds at customs and, in some instances, additional costs. What's more, inaccuracies and omissions in your commercial invoice will not only increase the risk of your merchandise getting delayed, it may bring greater scrutiny to your future shipments.

"If it becomes a recurrent issue for that particular shipper, customs may inspect the shipments coming from that customer more often in the future," says Acree.

Commercial invoice template

Visit the UPS commercial invoice page for a commercial invoice sample, and check out our detailed commercial invoice guide for a step-by-step breakout of how to complete the form. While there is no standard global format for the commercial invoice, customs officials worldwide are generally looking for the same information.

UPS Paperless Solutions: Taking the paper out of paperwork

UPS typically instructs customers to provide three paper copies of the commercial invoice with a shipment. To make things even easier, electronic documentation is also available for most international shipping destinations.

"We try to be paperless as much as we can," says Acree. Any company, regardless of size, can use UPS Paperless^® Invoice for free.

By enrolling in UPS Paperless Invoice, your information is submitted electronically for customs clearance to most destinations around the world. Whether you are shipping packages, air freight or both, in North America or around the world, UPS Paperless Invoice allows you to submit your commercial invoice, NAFTA Certificate of Origin, and packing list electronically. 

In addition to saving on paper and ink, UPS Paperless Invoice integrates with World Ease^®, UPS CampusShip^®, UPS Ready^® and WorldShip^® shipping systems and can:

• Reduce shipment delays due to missing paperwork
• Lower costs needed to prepare documentation
• Eliminate redundant data entry and errors
• Enable timely customs clearance
• Promote confidentiality of invoice information

UPS also offers a variety of other tools and information to help with international shipping. "We have some great custom tools available," Acree remarks. For example, Quantum View^® software provides insight into your inbound and outbound shipments, while UPS TradeAbility^® service can help with international trade compliance.

UPS can even help with securing export licenses if your product requires one, filing Certificate of Origin documentation to obtain preferential duty rates, and applying for additional permits if shipping a restricted commodity. Even small businesses can get started shipping around the globe.

Ship successfully overseas

While there's much to consider when shipping internationally, completing the commercial invoice fully and accurately should be at the top of your list. Check out our commercial invoice page for tips and resources on completing your customs paperwork, and visit our international shipping page to get started with your shipment today.

This is for informational purposes only.  It does not constitute legal advice – please consult with your own legal counsel for such advice. Also, do not rely on this information without performing your own research.