What is commercial invoice ? Complete guide | Red Sun IT Services

2025-10-03 • RedSun IT Services

What Is a Commercial Invoice? Definitions, Uses, and Key Differences

Commercial invoices are an integral component of international shipments. They constitute the principal export document that customs officials utilize in order to confirm the details surrounding what is being shipped, its origin, and how much duty or tax needs to be paid. In the absence of a properly completed commercial invoice, customs clearance can be delayed or even denied, resulting in additional fees, storage fees, and/or returns of goods. We define below exactly what a commercial invoice is, when you need one, how to complete one, and how a commercial invoice is different from other types of invoices used in international commerce.

What is a Commercial Invoice?

A commercial invoice is essentially the exporter’s final bill of sale for goods shipped internationally. In practice, it’s the document you send to the buyer after the goods have been shipped. Commercial invoice FedEx defines it as “a contract of sale… between the shipper and the receiver”. In other words, the commercial invoice states the exact items sold, the quantities, and the price agreed upon by the buyer and seller. FedEx even goes so far as to state that every international shipment has to include a commercial invoice (except for certain documents). The invoice provides customs with relevant information (descriptions and values, and the parties involved) to clear the shipment and tax duties on it.

Several authors validate its purpose. Wise refers to the commercial invoice as "a bill for goods sold... generally required for customs clearance." FreshBooks similarly states it is "the primary commercial document that customs organizations worldwide use for valuation and commodity control purposes." Ultimately, the commercial invoice states the same things as a sales invoice, but has additional information that needs to be listed for goods that are crossing borders.

Commercial Invoice Meaning

Beyond the basic definition, a commercial invoice has a specific legal and financial meaning in international trade. It is legally binding and is used as official evidence of the transaction. SendCloud describes it as “a special export document” that “serves as a formal request for payment” and provides “legal evidence of the transaction”. In plain terms, this invoice is not just a casual bill; it is the exporter’s final invoice, certified for export.

Everything relevant to the sale is on this invoice: seller and buyer information, descriptions of the items, costs, terms of sale, etc. Because it serves as the official account of what was sold, customs and tax authorities use the invoice to assess the actual value of goods.

Finally, FreshBooks emphasizes that international trade “wouldn’t be possible” without these documents, since they contain all the precise details needed to reconcile the shipment. In short, the commercial invoice is the final export invoice, the last word on the sale, and is required to legally move goods across borders.

When is a Commercial Invoice Required?

You will require a commercial invoice each time you sell goods across national borders. In practice, nearly all cross-border movements will require such an invoice. FedEx states that "all international shipments, except most document shipments, require a commercial invoice." Therefore, regardless of how you export merchandise (air freight, ocean freight, courier, etc.), you should add a commercial invoice.

The main exception is if the shipment stays within a customs union or free-trade area. For example, packages that stay within the European Union typically will not require a commercial invoice. SendCloud states that shipments that stay within the EU single market do not require this document either. But as soon as that shipment leaves that zone (for example, from an EU country to a non-EU country, or vice versa), a commercial invoice is required.

In summary, if you export or import across borders, you will need a commercial invoice. If you are shipping internationally (outside your home country or customs area), you will need to get a commercial invoice. If you ship without a commercial invoice, your shipment may face customs delays or even be rejected.

What is a Commercial Invoice Used For?

A commercial invoice serves multiple critical functions in international trade:

• Customs Clearance: Helps classify goods, calculate duties/taxes, and ensure compliance.
• Proof of Sale & Contract: Acts as legal evidence of the agreed transaction terms.
• Payment Request: Serves as the seller’s final bill to the buyer.
• Shipping & Insurance: Provides key details for carriers, insurers, and freight forwarders.
• Accounting & Records: Creates a paper trail for revenue and reconciles sales.

In essence, the commercial invoice bridges logistics, finance, and legal aspects of a cross-border sale. It ensures everyone (customs, banks, shipper, buyer) has a single, authoritative record of the transaction.

How to Create a Commercial Invoice

Creating a commercial invoice involves gathering all the required details in the proper format. Follow these steps to ensure your invoice is complete:

1. Use a Proper Template or Software: Start with a commercial invoice template. You can search online for “commercial invoice template Word” to find blank forms. For example, FedEx offers a downloadable invoice template, and there are many free Word/Excel templates (or software) available. Using a template or invoice software ensures you include all fields.

For instance, DHL’s MyDHL+ tool can auto-generate invoices using saved customer data. (Alternatively, use our standard online invoice generator to quickly create a professional invoice with all required fields.)

2. Enter Shipper (Exporter) and Receiver (Buyer) Information: On the invoice, clearly list the exporter’s full company name, address, and contact info, along with any tax or VAT number. Also, provide the consignee’s name and address (the buyer/importer). (FedEx requires that the invoice be in English and include these company details for both parties.)

3. Invoice Details: Include the invoice number and date, and specify the currency of sale. Note the terms of sale (Incoterms, e.g., FOB, CIF) and payment terms. Add the shipment’s air waybill or bill of lading number and shipping date.

4. List Each Item of Goods: For every product or item sold, provide a detailed description. Include the quantity, unit of measure, unit price, and total value for that line item. Be specific (e.g., model numbers, size, weight). Also include the Harmonized System (HS) code or commodity code for each item, and the country of origin.

5. Totals and Additional Costs: Sum the total value of all items. Then add any additional charges if applicable: e.g., total freight (shipping) cost, insurance cost, and packing fees. State the grand invoice total.

6. Currency and Tax Details: Repeat the currency used and indicate if prices include or exclude any taxes. If you charged a tax, clearly note the rate and amount.

7. Signature and Declaration: Finally, the exporter must sign and date the invoice, certifying that the information is true. (FedEx insists on this signed declaration at the bottom of the invoice.)

By following a commercial invoice template Word with these fields, you’ll create a complete commercial invoice..

Commercial Invoice vs Proforma Invoice

It’s common to confuse a proforma invoice vs commercial invoice. They look similar but serve different purposes:

• Timing: A proforma invoice is a document provided to the buyer prior to completion of the sale and is simply an advance quote sent upon buyer request or when issuing the purchase order. In contrast, the commercial invoice is issued after shipment of goods, that is, after the sale has been completed.
• Legality/Binding: A proforma invoice has no binding effect; it is simply an estimate of what you expect to charge. You cannot demand payment on the proforma invoice. The commercial invoice is a sales invoice with a legally binding effect; it represents the final terms of the sale and is used to legally claim payment and for processing through customs.
• Content: Both invoices contain similar fields (buyer/seller, descriptions, etc.), but on a proforma, the values are estimates. On a commercial invoice, you will enter the actual units and final price of the goods shipped. The proforma invoice might say “100 units at $10 each (estimated $1,000 total)”, where the commercial will state the actual units and final $1,000 total.
• Purpose: You provide a pro forma invoice to allow the buyer (or buyer's bank/customs) to make decisions before the sale, such as applying for import permits, arranging financing (such as a letter of credit), or budgeting for the purchase. Customs does not typically use pro forma invoices to clear goods. The commercial invoice is the document that customs uses to clear the shipment, and it is the official request for payment after delivery.
• Payment: No one is obliged to pay a pro forma invoice. By contrast, the commercial invoice is the document the seller uses to demand payment under the agreed terms.

In short, “pro forma vs commercial invoice” boils down to an estimate vs a final bill. Use a pro forma invoice before the sale to outline expected costs; use a commercial invoice after the sale to record the actual sale details, facilitate customs, and collect payment.

Commercial Invoice vs Standard Invoice

A standard invoice (a domestic sales invoice) is very different from a commercial invoice. A standard invoice is basically a billing document for typical business transactions within the same country. It usually states the seller and buyer, description of goods or services, quantity, unit price, tax, total amount, and payment terms. It concentrates on billing the customer and accounting for the sale without consideration for customs.

In contrast, a commercial invoice is used when sending a product internationally. A commercial invoice is essentially a “supercharged” invoice with added information for customs. For example, a domestic invoice typically does not include things like HS codes or country of origin. A commercial invoice must include cites because it is required by customs.

Conclusion

In short, a commercial invoice is the legal backbone of any international shipment; it ensures smooth customs clearance, accurate duty assessment, and clear proof of the sale. Take the time to complete it carefully, double-check HS codes, values, and Incoterms, and always confirm country-specific requirements before shipping. If you want to speed up the process and avoid costly mistakes, use a reliable invoice tool to generate a compliant commercial invoice PDF in minutes, then ship with confidence.

If you want to make a standard invoice, you should check out Red Sun IT Services' online invoice generator tool. If you want to make a commercial invoice, you should check FedEx or other famous commercial templates.