Commercial invoices

It is still an invoice: it says who sold what to whom, and for how much. What changes is the reader. A client only needs to know what they owe. A customs officer needs to identify the goods, value them and check where they were made, and the extra details on a commercial invoice are there for that.

It is only for goods. Design work, writing or consulting sent to a client abroad never goes through customs, so an ordinary invoice is all it needs. If you post a printed or made product, that parcel needs a commercial invoice.

What it carries beyond an ordinary invoice

The UK government's guide to creating an export invoice lists what to include. On top of the invoice number, date, and the seller's and buyer's details, it asks for:

• The consignee: the final recipient of the goods, if they are not the buyer.
• Related paperwork: the number and date of the pro forma invoice, purchase order or sales contract.
• Unit price, method of payment, currency and any discounts or additional charges.
• Weight and number of goods: quantity, gross and net weight, and the number, weight and type of packages.
• The HS code and a plain English description of each product.
• Incoterms: the trade terms agreed with the buyer.
• Marks on the packaging, such as "1 of 6 boxes".
• Country of origin of the goods.
• Transport details: the means of transport and the route.
• The total value and any additional costs, such as freight and insurance.

The same page is blunt about the HS code: "Tax and duties will vary according to classification number, and you're also liable legally if you've misclassified."

The terms that are new to most people

• HS code. The Harmonised System code, also called a commodity or tariff code, is the number customs uses to classify a product, and the duty rate follows from it. In the UK you can look one up in the Trade Tariff.
• Incoterms. Short codes, published by the International Chamber of Commerce, that say who pays for and is responsible for the goods at each stage of the journey, from your door to the buyer's. Agree one with the buyer before you ship, and put it on the invoice.
• Country of origin. Where the goods were made, which is not always where they are shipped from. It can change the duty, because some trade agreements cut the rate for goods made in a partner country, as the UK's agreement with the EU does for goods that prove their origin.

What the US asks for

Each country sets its own list, and the importing country's is the one that counts at the border. The US version is in 19 CFR 141.86. Much of it overlaps with the UK list: a detailed description, quantities, the price of each item in the currency of the purchase, the country of origin, and every charge itemised by name and amount, including "freight, insurance, commission, cases, containers, coverings, and cost of packing". Two points stand out:

• Language. The invoice must be in English, or come with an accurate English translation.
• Packing. It must state in adequate detail what is in each individual package.

For anything beyond a parcel or two, the carrier or a customs broker will know what the destination country needs, and is the one to ask.

VAT on exported goods

In the UK, goods sent abroad are usually zero-rated for VAT. HMRC's VAT Notice 703 puts it as "the supply of exported goods is zero-rated provided the conditions in this notice are met", and those conditions include keeping proof the goods left. On the invoice, that is a VAT line at 0%, not a missing one. Whether your shipment meets the conditions is a question for that notice or your accountant.

Making one in the invoice generator

The invoice generator here has no fields for HS codes, weights or Incoterms, so a commercial invoice made in it puts those in the text. It works for a small shipment; for regular exports, a carrier's or customs broker's own form is the better tool.

1. Press + Change wording and set Document title to "Commercial invoice".
2. Write each item's description with its HS code and country of origin, such as "Ceramic mug, stoneware. HS 6912.00. Made in UK".
3. Add the freight with + Add shipping, so it is a line of its own.
4. In Notes, put the Incoterm, the consignee if they are not the buyer, the number of packages with their weights, and the number of any pro forma or purchase order.