If you are a new WooCommerce store owner selling your products internationally, it could be a daunting task to make all the invoices and valid documents ready to ship your products internationally.
When it comes to international trade, along with the regular WooCommerce invoice, you also need to produce the commercial invoice.
This article aims to simplify the meaning of commercial invoices and specify how to fill out a commercial invoice to make it a valid document. The article also holds the answer to why you need to mention shipping charges in your commercial invoice.
What is Commercial Invoice?
When selling through WooCommerce, the usual invoice that is generated is a proof of sale transaction.
When shipping internationally, your products have to pass through customs. The customs duty will be determined based on the details provided in the commercial invoice.
In simple terms, a commercial invoice is simply proof of sale between the buyer and seller. Unlike a bill of lading concerned with the ownership of goods, a commercial invoice is proof of contract between the buyer and the seller.
What Do You Need To Include In A Commercial Invoice?
Since the commercial invoice is the document on which the customs duty is decided, the document must contain a few specific details. Here is how to fill out a commercial invoice.
- Name and address of person shipping the goods – the seller.
- Shipping details like the shipment ID, the date of shipping the product, the reason for exporting the goods (if it involves a sale, repair, or sample).
- Name and address of the buyer
- Name and address of the actual place of delivery (if different from buyer)
- Product description like the number of products, units of measure, unit cost, the actual makeup of the products, and the HS Code of the products.
- The actual cost of the shipment – the total cost of products, freight, insurance, other charges, and total invoice amount.
- The total number of packages in the shipment, the total weight of the shipment, and the currency in which the transaction has been conducted.
- The country of origin of products must also be mentioned in the commercial invoice.
- There should be an unmistakable signature at the bottom with the title of the signer (depending on the carrier, you can have a digital signature)
What is HS Code, and Why Should You Include It In Your Commercial Invoice?
When you are shipping your goods internationally, you need to ensure that each product on your invoice has an HS code. The World Customs Organization decides the HS Code.
An HS code (Harmonized System Code) is a specific series of numbers assigned to a product group. This number allows customs authorities worldwide to calculate the correct amount of duty or tax to levy on the products.
Although the HS code is usually a string of six numbers, each country may add a specific series of numbers to the HS code to make it unique to that country.
UPS Paperless Commercial Invoice
WooCommerce users who opt for UPS as a shipping carrier have a unique advantage over others. UPS allows you to have paperless commercial invoices with an aim to promote sustainability and reduce wastage.
It is easy to attach a UPS commercial invoice to your shipping label, especially if you have the PluginHive WooCommerce UPS Shipping Plugin with Print Label installed.
The commercial invoice must include all the required details that can help it to clear customs quickly. Any small error in the document can cause undue delays at customs, cause additional taxes to be levied, or even have the shipment sent back to the seller.
Shipping Charges in Commercial Invoice
Shipping charges are the cost calculated by the shipping company based on the weight and other dimensions of your product. This amount also changes depending on the mode of transport you have chosen for shipping – road, air, or ship.
The total value of any commercial invoice includes the cost of products, discounts levied, freight charges, and taxes.
Each country has its way of calculating customs duties and taxes. Customs duty can be calculated on CIF (Cost, Insurance, Freight) or FOB (Free on Board).
In CIF, the customs duty is a percentage of the cost of products, Insurance charges of the goods, and the freight value. And, in FOB, customs duty is a percentage of the total cost of goods and all expenses incidental to delivering the goods to the customer.
In either case, if a buyer is paying for freight charges at the time of purchasing the products, it needs to be mentioned in the commercial invoice. A commercial invoice is incomplete if even a single detail is missing.
If freight charges are missing from the commercial invoice, customs may charge a higher amount as a duty. Or the customs authority may hold the goods indefinitely and charge a shipping delay charge on the value of the goods.
On the other hand, some countries may not charge duty on freight charges paid by the buyer. However, to be on the safer side and comply with all rules, freight charges need to be included in the cost. This ensures that products are delivered to the customer without delay.
Furthermore, while printing a commercial invoice, it may happen that the system does not print the freight charges on the invoice. This may delay the shipping of products to the customer.
Automate UPS Paperless Commercial Invoice Using PluginHive WooCommerce UPS Plugin With Print Label
With the PluginHive WooCommerce UPS Shipping Plugin with Print Label, it is easy to print a commercial invoice that is acceptable across all customs authorities. There is no additional work that you need to do. The details regarding your products and their charges are already available on your system. The plugin comes equipped with the paperless commercial invoice option. The details are filled in automatically once you generate the invoice and the plugin.
The only thing you need to do is tick the box that says “Include Shipping Charges in Commercial Invoice” when activating your plugin. This ensures that you comply with customs requirements and can ensure quick delivery of products to your customers. It also helps you get accurate real-time charges directly from the UPS website – read more about that at PluginHive WooCommerce UPS Shipping Plugin With Print Label.