New

The Difference Between Commercial and Shipping Invoices

Author: 
Elie Toubiana
 | 
Date: 
September 17, 2022

Consider running a successful shipping company where everything appears to be going ell. You arrive at work one day to find a customer complaining that their invoice did not accurately reflect their order.

This complaint came from a significant customer, and your company cannot survive without their patronage. You do everything you can to make things right, but you must avoid this situation in the future.

How do you do it? Continue reading to understand the distinction between a Shipping Invoice and a Commercial Invoice.

Comparing Commercial Invoice & Shipping Invoice

Commercial Invoices and Shipping Invoices can be similar, but there are distinct elements that make them different. We will compare one type of Shipping Invoice, a Pro-Forma Invoice, with a Commercial Invoice. Proforma and commercial invoices are essential documents in the global trade process.

What is a Proforma Invoice?

A Proforma Invoice document is an essential sales document created by a seller of goods. When an International Order is confirmed, the seller will create a Proforma Invoice document and send it to the buyer.

This document will confirm the new order's details. It also usually includes the seller's bank information to request payment. It's also worth noting that a Proforma Invoice is issued before the goods have been manufactured or delivered.

Customers are given a projected bill of sale, also known as a preliminary bill of sale before products are shipped or transported. In most scenarios, the invoice will include a breakdown of purchased items and other vital details such as shipping volume and transportation fees.

What is a Commercial Invoice?

After the goods are delivered or shipped, a Commercial Invoice document is issued to the buyer. Furthermore, the commercial invoice format is the same as the proforma format. But, more importantly, the commercial invoice confirms the exact quantity of products loaded and shipped.

Key Differences

We have shared below the main differences between these two invoices.

●    First, even though it serves as a contract and proof of sale between the importer and exporter, a commercial invoice does not serve as a title of ownership.

●    Second, a business invoice is created solely to identify the products being shipped, which is required by customs to determine the value of the shipment. Taxes and duties are levied based on the evaluation.

The two documents are essentially the same thing; the difference also can be that the final product amount on the Commercial Invoice can be different. Furthermore, the quantity of products ordered (from the Proforma Invoice)frequently differs from the actual quantity of goods shipped (Commercial Invoice). This, however, is common in global trade.

Final Words

However, the difference in the number of products supplied could be due to various factors. The most common reason is that suppliers can have manufacturing issues. Another reason is that the suppliers did not accurately estimate how many products would fit inside shipping containers. Please read for more information on some of the most common shipping delays. There are a plethora of tools available to make invoices for your business. We recommend Invoice Builder to generate top-notch invoices online.

Related Articles

Start your journey to an
immersive online payment experience

Schedule a demo