Navigating international shipping from Australia? The commercial invoice is your key to seamless global trade. Discover how DHL Express Australia can simplify your shipping process and ensure your goods reach their destination smoothly.
International shipping is the backbone of global trade, connecting businesses across borders and enabling seamless commerce. At the heart of every successful shipment lies a critical document: The commercial invoice. More than just a bill, this document serves as a legal record of the transaction between the exporter and importer, ensuring smooth customs clearance, accurate duty and tax assessment, and timely delivery of goods.
In this guide, we’ll explore what a commercial invoice is, its essential elements, common mistakes to avoid, and tips for creating a compliant invoice. Whether you’re new to international shipping or looking to refine your processes, this guide will help you navigate the complexities of global trade with confidence.
What is a commercial invoice?
Let’s start with a common question — what is a commercial invoice used for?
A commercial invoice is a specialised export document that acts as a customs declaration for goods crossing international borders. It details the items being shipped, their value, and the transaction between the buyer and seller. Customs authorities use this document to assess the applicable taxes, tariffs, and duties on imported goods.
Beyond customs clearance, a commercial invoice also serves as a contract and proof of sale, outlining key details such as product descriptions, quantities, payment terms, and conditions of the transaction. Providing complete and accurate information helps ensure smooth processing and compliance with international trade regulations.
However, while a commercial invoice verifies a sale, it does not prove ownership of the goods. That role belongs to the Bill of Lading, which acts as the title document for shipments. Without a properly completed commercial invoice, export shipments can face delays, penalties, or even rejection at customs.
How to create a commercial invoice for international shipping?
To ensure your commercial invoice meets international shipping requirements, here’s what is required:
1. Bank Details, shipper, and receiver information
The commercial invoice must include bank details for the financial transaction between the buyer and seller, though this may not be necessary for proforma or non-commercial invoices.
Additionally, the shipper’s and receiver’s details must be clearly listed, including:
- Company name
- Address
- Contact details (phone number, email)
- Australian Business Number (ABN) for exporters
- Tax ID/VAT number for the importer
2. Goods description
A detailed and precise description of the goods being shipped is required. Avoid vague terms like “samples,” “parts,” or “electronics” as they can lead to customs delays or rejections. Instead, use specific descriptions that include:
- Product name (e.g., Laptop instead of “Electronics”)
- Quantity
- Material composition
- Intended use of the product
3. Commodity code (HS Code)
Each export shipment must have a Harmonized System (HS) code, which is an internationally recognized classification number. The HS code helps customs determine the correct duty rates and ensures the clearance process is smooth. Using the right HS code can prevent misclassification and unexpected charges.
4. Country of origin
The country of origin refers to where the goods were originally manufactured, not where they are being exported from. If the product has components from multiple countries, each must be listed accordingly. This information is critical for determining eligibility for preferential trade agreements and applicable duty rates.
5. Invoice total and declared value
The total declared value of the shipment must be recorded based on the Incoterms used in the sale. Depending on the agreement:
- If the seller covers freight and insurance costs, these must be included in the declared value.
- If the buyer is responsible for shipping charges, only the value of the goods should be stated.
6. Type and reason for export
When shipping internationally, exporters must specify both the type of export and the reason for export to ensure accurate customs processing and avoid potential delays.
Type of export
The type of export defines the nature of the shipment and helps customs authorities apply the correct regulations. Common export types include:
- Permanent: Goods sold and shipped permanently.
- Temporary: Items sent for temporary use, such as trade shows, exhibitions, or testing. These must be returned after a set period.
- Repair & return: Goods shipped for repairs and then returned to the sender.
Reason for Export
Along with the type of export, the invoice must also indicate the reason for shipping. This provides customs with additional clarity about the transaction. Typical reasons include:
- Sale: Items sold and delivered to a buyer.
- Gift: Non-commercial shipments sent as a present.
- Sample: Products sent as promotional samples, often for business evaluations.
- Replacement: Goods shipped to replace faulty or damaged items.
- Personal use (Not for resale): Items for individual use, not intended for commercial resale.
- Repair or after repair: Goods sent for repairs or returned post-repair.
7. Terms of trade (Incoterms)
Incoterms (International Commercial Terms) define the responsibilities of the buyer and seller regarding transportation, costs, and risk. This section should indicate the applicable Incoterm for the shipment. Some commonly used Incoterms for Time Definite International (TDI) services include:
- EXW (Ex Works)
- FCA (Free Carrier)
- CPT (Carriage Paid To)
- CIP (Carriage and Insurance Paid To)
- DAP (Delivered at Place)
- DAT (Delivered at Terminal)
- DDP (Delivered Duty Paid)
Selecting the correct Incoterm ensures clarity on shipping responsibilities and cost-sharing between parties.
Additional elements that may be required
While not always included in every commercial invoice template, the following details may also be required depending on the shipment:
9. Air Waybill Number
The Air Waybill (AWB) number is a unique tracking number assigned to shipments transported by air. This helps logistics providers track and manage shipments throughout transit.
10. Unit net weight and subtotal weight
The invoice should specify:
- Unit net weight: The weight of a single unit of the product
- Total weight: The total weight of all items in the shipment
Do note that this is different from dimensional weight, which accounts for the volume of a package rather than its physical weight. Providing accurate weight details ensures the shipment is processed correctly and helps avoid unexpected shipping fees.
Common mistakes to avoid
Inaccurate or incomplete information
Providing incorrect or missing details on the commercial invoice can result in customs delays, penalties, or shipment rejections. Ensure all fields are accurately filled out to prevent disruptions in the shipping process.
Incorrect HS codes
Using the wrong HS code can lead to misclassification, incorrect duty and tax assessments, and delays in customs clearance. Always verify the correct HS code for your goods before shipping.
Vague goods descriptions
As mentioned earlier, generic descriptions such as "parts," "samples," or "electronics" are not acceptable for customs classification. A clear and detailed description—including product name, quantity, materials, and purpose—helps prevent shipment delays and ensures proper handling.
Undervaluing goods
Intentionally declaring a lower value to reduce duties and taxes is not only unethical but can also lead to severe legal consequences, fines, or shipment confiscation. Always declare the correct value of your goods to comply with international regulations.
Tips for creating a compliant commercial invoice
1. Use a template
Utilizing a standardized commercial invoice template ensures that all necessary details are included, reducing the risk of missing information. When shipping from Australia, consider using Australia-specific invoice templates for compliance with local regulations. DHL Express provides downloadable commercial invoice templates and other export documents, which can be accessed here through MyDHL+.
2. Double-check for accuracy
Review all invoice details carefully before submission. Ensure that product descriptions, values, HS codes, and all required fields are correct to avoid delays at customs.
3. Consult with experts
For complex shipments or unfamiliar customs regulations, seek guidance from customs brokers or freight forwarders. Their expertise can help ensure compliance and streamline the shipping process.
4. Keep records
Maintain copies of all commercial invoices for your records. These documents may be required for customs audits, tax filings, or dispute resolution in case of shipment discrepancies. Keeping well-organized records can protect your business from future complications.
DHL Express: Simplifying international shipping
The commercial invoice is a cornerstone of international shipping, playing a vital role in ensuring smooth customs clearance and successful trade transactions. By prioritizing accuracy, completeness, and compliance, businesses can avoid delays, penalties, and other challenges.
For businesses in Australia looking to expand their global reach, DHL Express is your trusted partner in international logistics. From expert guidance to reliable delivery services, we’re here to help you navigate the complexities of global trade with ease.
Ready to ship with confidence? Open a DHL Express business account today and take the first step toward seamless international shipping.
*Disclaimer: Any regulatory information contained herein is for informational purposes only and DHL assumes no responsibility for the accuracy of the information. DHL does not provide specific regulatory or legal advice to the public and you are encouraged to seek your own legal or compliance counsel.
