Note: This guide is for educational purposes. Customs regulations (e.g., CBP, HMRC, EU Customs) change frequently. Always verify specifics with a licensed customs broker.
Sending an invoice domestically is a request for payment. Sending an invoice internationally is a legal declaration. When goods cross borders, your invoice becomes the primary document used by customs officials to classify goods, assess duties, and clear shipments. A single missing digit in an HS code or a vague description can result in weeks of delays, heavy fines, or seized goods.
1. Foundations: Commercial Invoice vs. Proforma Invoice
The most common mistake in international trade is confusing these two documents. While they look similar, their legal functions are entirely different.
| Feature | Proforma Invoice | Commercial Invoice |
|---|---|---|
| Timing | Sent before shipment. | Sent with/after shipment. |
| Purpose | A quote/estimate to secure a deposit or import license. | Final bill of sale and mandatory customs declaration. |
| Payment | Not a demand for payment. | Legal demand for payment. |
| Values | Values can be estimated. | Values must be 100% accurate to the transaction. |
Need to send a preliminary quote? Use our Free Proforma Generator.
2. The Anatomy of a Perfect International Invoice
To ensure your shipment clears customs smoothly, your invoice must serve as a complete data source for authorities. Missing "Ship To" details or Tax IDs are top reasons for rejection.
A. Party Details (Who is Who?)
- Exporter (Seller): Your full legal business name, address, and contact info.
- Importer (Sold To): The entity paying for the goods. Must include their Tax ID (VAT/EORI/EIN).
- Consignee (Ship To): The physical location where goods are delivered. Often different from the "Sold To" address.
B. Shipment Data
- Invoice Number & Date: Unique sequential ID.
- Air Waybill (AWB) / Bill of Lading: The tracking number assigned by the carrier.
- Total Net & Gross Weight: Essential for logistics and duty calculation.
3. Customs Compliance: HS Codes & Incoterms
This is the technical core of international invoicing. Errors here cause the most significant financial penalties.
Harmonized System (HS) Codes
Every physical product has a global identification number known as an HS Code (or Tariff Code). Customs uses this to determine how much duty to charge.
The first 6 digits are universal. Digits 7-10 vary by country. Our tool has a dedicated field for this mandatory code.
Country of Origin
This refers to where the product was manufactured, not where it is being shipped from. This is critical for trade agreements (e.g., USMCA, EU Single Market).
Incoterms® 2020 (Terms of Trade)
Incoterms define who pays for shipping, insurance, and duties. Choosing the wrong one can cost you thousands.
| Term | Description | Seller Responsibility | Buyer Responsibility |
|---|---|---|---|
| EXW | Ex Works | Make goods available at factory. | Shipping, Insurance, Customs. |
| FOB | Free on Board | Load goods onto ship/plane. | Freight cost, Insurance, Customs. |
| DAP | Delivered at Place | Shipping to destination. | Import Duties & Taxes. |
| DDP | Delivered Duty Paid | Shipping, Insurance, Import Duties. | Unloading at destination. |
4. The International Shipping Workflow
Understanding the flow of documents is crucial. Here is how the Invoice, Packing List, and AWB work together.
1. Commercial Invoice
Created by Exporter. Declares value & details for Customs.
2. Packing List
Confirms physical contents (weight/dimensions) for logistics.
3. Air Waybill (AWB)
Carrier label linking Invoice & Package together.
4. Customs Clearance
Officer checks Invoice HS Codes against Goods.
5. How to Create an International Invoice (5 Steps)
- Select the Right Template: Do not use a standard domestic invoice. Use a dedicated Commercial or International template.
- Classify Every Item: Look up the HS Code for each line item. List the "Country of Origin" next to the description.
- Accurate Description: Avoid vague terms like "Samples". Be specific: "100% Cotton Men's T-Shirt".
- Define Value & Currency: State the unit price and total value in a clear currency (e.g., USD, EUR). Customs never accepts a $0 value.
- Sign & Date: A commercial invoice must be signed by an authorized representative to certify the information is true.
6. Paperless Trade (ETD) & Digital Documents
Modern logistics is moving away from physical paper pouches. Carriers like DHL, FedEx, and UPS now use Electronic Trade Documents (ETD).
7. Global Taxes: VAT, GST & Brexit
Tax rules change when borders are crossed.
- B2B: Apply the Reverse Charge Mechanism. List both your VAT ID and the customer's VAT ID on the invoice.
- B2C: In the EU (via OSS) and UK, you may need to collect VAT based on the customer's location.
Trade between the UK and the EU now requires a Commercial Invoice and customs declaration, even for short distances across the channel.
8. Financial Strategy: Currency & Banking
Banking Details (IBAN/SWIFT)
Domestic routing numbers often don't work internationally. Always provide:
- IBAN: Essential for Europe/Middle East.
- SWIFT / BIC Code: Identifies your specific bank globally.
Use our Multi-Currency Invoice Tool to format these banking details correctly.
9. Frequently Asked Questions
What is the difference between a Commercial Invoice and a Proforma Invoice?
Timing and Legal Status. A **Proforma Invoice** is a preliminary quote sent *before* goods are shipped to declare value or secure a deposit. A **Commercial Invoice** is the final bill of sale sent *after* shipment, used by customs to assess duties and taxes. Only the Commercial Invoice is a legal demand for payment.
Do I need an HS Code for selling services?
No. Harmonized System (HS) Codes are used exclusively for classifying **physical goods** crossing borders. If you are selling digital services or consulting, you do not need an HS code, but you must adhere to 'Place of Supply' rules for VAT/GST.
What happens if I don't include an Incoterm?
Without an Incoterm (e.g., DAP, FOB), it is unclear who pays for shipping, insurance, and import duties. This often leads to shipments being held at customs until the receiver agrees to pay unexpected fees, damaging your client relationship.
Can I hand-write a commercial invoice?
While technically legal in some jurisdictions, it is highly discouraged and often rejected by modern customs scanners. Always use a typed, computer-generated PDF to ensure legibility and automated processing (OCR).