Commercial invoice, also known as Commercial Invoice, is a type of sales contract between the buyer and the shipper in logistics processes. When selling abroad, you need to make the relevant contract so that your products can easily pass through customs. With this invoice, expenses and costs such as customs duty are determined. With this content, you can quickly learn the answers to questions such as what a commercial invoice means and what its features are.
Why is a Commercial Invoice Used and What Does It Do?
Commercial invoice is one of the documents that is most subject to international trade practices. This document, translated into our language as "commercial invoice" and "foreign invoice", belongs to the commercial documents class in terms of its purpose of use. The difference between this invoice and a proforma invoice is that it is issued after the sale in import and export practices.
How to Fill in a Commercial Invoice? What Information Should It Contain?
To the question of what a commercial invoice is, the simplest answer is a commercial invoice. At this point, the most distinctive nuance is that the information on the invoice is in English. Information such as address, contact details, and tax number must be written in English. In addition, information such as buyer and sender should be added to an appropriate place on the invoice. Additionally, the information that needs to be specified can be listed as follows:
• Product description
• Reason for export
• Date of shipment and order number
• Quantity of each of the products
• Incoterms
• GTIP code
• Insurance costs
• Weight
• Country of origin
• Declared values of products
For the commercial invoice completion practice, you need to sign the document in the final stage. It is also quite important for the person signing this invoice to state their position in the company on the invoice.
What Documents Are Required for a Commercial Invoice?
In foreign trade operations, it is important that the trade and transport agreements carried out by the two parties become official. Many documents are used for this purpose. Likewise, there are some documents for the transport process to be approved by customs. The documents prepared for the commercial invoice are important in terms of the successful, correct, and complete realization of the buying and selling transactions between the buyer and the seller. The documents required for a commercial invoice are as follows:
• Customs Declaration
• Proforma Invoice
• Freight Invoice
• Transport and Circulation Documents
• Consular Invoice
It is worth reminding that some of the documents we mentioned above must be issued in all foreign trade applications. Also, the freight invoice is only issued in cases where the exporter undertakes the payment.
What is the Role of Commercial Invoice in Customs Operations?
As we have mentioned before, a commercial invoice is a document required in export practices and is used in the importer's country. With the help of the commercial invoice, it is determined whether custom duty will be applied to the goods in import. Likewise, if custom duty is to be applied to the goods, how much import tax is involved is also understood by looking at the commercial invoice.
It is clear that the scope of questions like what a commercial invoice is and what it does is wide. Thanks to the relevant document, many customs procedures are carried out more easily. Moreover, this document also shows the payment the importer will make to the exporter. In fact, the payment made is also included on the relevant invoice. From time to time, the identity of the manufacturer and which country they are from may be unclear. In such cases, the parties can also find the required information from the commercial invoice in a short time.
How is Commercial Invoice Used in Payment Process?
A commercial invoice can be divided into different usage groups in payment processes. The related document; cash against goods, cash against documents, and cash in advance exports can be prepared in a more practical way than other methods. Except for the letter of credit, documents are not examined in all payment methods. This situation allows the commercial invoice document to be prepared more easily. It is appropriate for invoices to be printed on the seller's letterhead and signed by an authorized person of the company.
All documents present in letters of credit transactions are examined by banks. This makes preparing a commercial invoice under a letter of credit more difficult than other payment types. While preparing a commercial invoice under a letter of credit, some conditions are taken into consideration. After a few applications that need to be made, the invoice in question is presented to the bank specifically for the number in question in the letter of credit.
Commercial Invoice Example
A commercial invoice example is among the topics that those involved in import and export are frequently curious about. It is worth underlining that a standard commercial invoice does not exist under any circumstances. Practitioners prepare a commercial invoice for each transaction in line with their own needs and expectations. There is no requirement for any foreign trade document content to be the same as the content of another document. At this point, you can prepare the document that appeals to you and your needs most on a transaction basis.
Difference Between Basic Invoice and Commercial Invoice
The difference between a basic invoice and a commercial invoice is one of the most curious topics. Unlike a basic invoice, a commercial invoice is a type that has cancellation, acceptance, and rejection rights. The buyer and seller agree to trade using a commercial invoice. Following this, the exchange of services or products takes place. In the final stage, the seller issues and sends the commercial invoice to the buyer.
The seller prepares the sent commercial invoice and sends it to the buyer. After this stage, the seller's waiting period for a response from the buyer begins. The buyer can accept the invoice or, conversely, reject it. If the buyer does not process the invoice within 8 days after the relevant invoice reaches them, the relevant documents are automatically accepted by the system. In this sense, the rejection period for a commercial invoice is 8 days.
