Any time you’re shipping internationally, it’s essential that you accurately and completely document various aspects of your shipment. Among other things, this helps to ensure that your company remains in compliance with government regulations as well as any applicable taxes and tariffs.
From time to time, we get questions from FedEx shippers about the commercial invoicing process—including, for example, the difference between a standard invoice and a commercial invoice, and which invoice type our parcel invoice audit service applies to.
In this post, we’ll explain what you need to know about commercial invoicing:
- What is a commercial invoice?
- When do I need a commercial invoice for FedEx?
- How do I create a commercial invoice?
- How do FedEx surcharges apply to a commercial invoice?
What Is Meant by Commercial Invoice, and How Is It Different From a Standard Invoice?
Let’s start by clarifying what, exactly, the difference is between a standard invoice and a commercial invoice. A “standard” invoice, also sometimes just called a bill, is a detailed document a seller issues to a buyer. This type of invoice commonly includes information about the products or services being sold, and their quantities and prices. It may also include payment terms, when applicable.
By contrast, a commercial invoice is a specific type of document that relates to international sales and is required by Customs. It’s used to calculate applicable tariffs and/or international commercial terms, and includes information like shipment quantities, descriptions, weight, and volume, as well as the shipment’s total value and packaging details.
When Do I Need a Commercial Invoice for FedEx?
According to FedEx’s terms, a commercial invoice “is required for all international commodity shipments, ”meaning any non-document international shipment with commercial value.
More specifically, FedEx defines a commercial invoice as “the official transaction record between a shipper and a recipient,” and “the most common source of information used by Customs officials to clear FedEx Express shipments across international borders.”
In other words, a FedEx commercial invoice is needed for any international shipments with commercial value (also known as international commodity shipments)—a broad classification that covers most non-document shipments.
Why Is It Important to Complete a Commercial Invoice Accurately?
Since a commercial invoice is primarily a Customs document, completing it accurately helps ensure your shipment will be able to clear customs without requiring any further paperwork. Because taxes and tariffs are calculated and applied based on the information compiled in the commercial invoice, getting it right keeps shipments on time. On the other hand, inaccurate information can expose shippers to potential legal consequences from running afoul of customs.
How Do I Create a Commercial Invoice for FedEx?
It’s relatively easy to find a FedEx commercial invoice template, or you can create one from scratch. Specifically, FedEx includes a blank template to use, a completed example to refer to, as well as other FedEx customs forms. Either way, the information you’ll need to document to meet commercial invoice requirements for FedEx or other shippers is:
- Seller details, like the business name, address, and phone number
- Customer details, including billing and shipping addresses
- Invoice number and customer reference number
- Sale and payment terms, including any applicable details and specifying the currency
- Shipment details including shipment method (e.g., air, ocean, ground)
- Description of the shipment’s contents, including item description, container type and weight, quantities, etc.
- The shipment’s total price and total commercial value
- Packaging details, like how many individual boxes make up the total shipment\
- Any additional charges that have been agreed upon (e.g., insurance, transportation fees)
Many companies choose to create their own branded template for their commercial invoices. If you choose this route, you can use the list above as a checklist to ensure you’re not omitting anything that could result in a shipment delay or other related issues.
Gain Shipping Insights with ShipSigma
ShipSigma is here to help high-volume parcel shippers get the best rates possible for their UPS and FedEx. Through our proprietary processes and technology, we help our customers reduce their shipping costs by 25% or more with parcel invoice audits and carrier contract negotiation. Learn more about all we do by contacting us today, or feel free to review our website, where you can get into the deeper details and read testimonials of the results we’ve helped our customers achieve.