To better understand electronic commercial invoices, it helps to understand what a commercial invoice is and how the electronic version differs from the standard.
A commercial invoice is required on all non-document cross-border shipments. The commercial invoice is the primary document that allows a shipment to pass through customs into the importing country. The commercial invoice helps customs determine applicable duties, taxes, and fees based on the important information it contains about the goods being shipped, the shipper and receiver, and the transportation specifics.
Although both forms contain the same information, a commercial invoice is only electronic if it is curated, sent, and received in a systematic electronic format that allows for automated and electronic processing.
We know that the standard and electronic forms fulfill the same purpose and look similar. However, a physical commercial invoice will have to be filled out by hand or printed out at the very least, whereas electronic commercial invoices are both filled out and submitted to the carrier online. Below is an example of what a commercial invoice (electronic or physical) looks like with its required fields of information.
While the only difference between the two types of invoices is their format, the commercial electronic invoice offers several benefits that the paper form doesn’t.
The electronic format fulfills all the same purposes and is used for the same reasons as the paper format, but it also offers several benefits, such as:
Sustainability: the electronic form is paperless, which is more sustainable because it saves paper, time, and costs associated with printing
Efficiency: no need to print and attach trade documents, resulting in fewer clearance delays because electronic documents are often pre-cleared and can’t get lost
Ease and simplicity of use: easier to keep track of shipment data (electronic documentation is saved)
Reduced risk of fraud: the software available to send electronic invoices is secure, so there’s less chance of experiencing fraud and data theft
Convenience: physical commercial invoices have to be filled out by hand, while electronic invoices are mostly generated for you
Because of the benefits electronic commercial invoices offer, some countries and carriers favor electronic trade documents. International carriers do not support electronic commercial invoicing in all countries, but they are supported in most countries.
Most major carriers allow you to create electronic commercial invoices from their automation/shipping platform or software. The following information is needed to fill out an electronic commercial invoice, which is essentially the same as the requirements for a paper commercial invoice:
Additional information may be required for certain shipments.
First, you will need to activate electronic commercial invoice generation in your preferred shipping platform. The steps may vary from carrier to carrier and platform to platform, but the process will look somewhat like the following:
In your shipping carrier software or shipping platform, locate shipping settings (or the equivalent) within your account
Activate/enroll/enable/allow paperless trade documentation (or the equivalent)
Choose whether you would like to create invoices on the platform or upload your own
Read and accept the terms and conditions to continue
Set up preferences
The electronic invoice system will generate the invoice reference number (IRN) and a quick response code (QR code)
Upload an electronic signature to the invoice and QR code
Upload additional shipping documents as needed, e.g., Certificate of Origin or Declaration Statement
The electronic commercial invoice will transmit to the destination country’s customs authority to facilitate clearance of the shipment
If you are using Zonos Landed Cost for calculations, then you can create labels for many carriers in Zonos Dashboard, which will auto-fill the commercial invoice for orders in the system using the order details, such as customer information, item descriptions, HS codes, etc. Additionally, if the carrier and destination country accept electronic commercial invoices, then Zonos Dashboard uploads the commercial invoice for you and attaches it to the label automatically.
What if I want to offer discounts, promo codes, free items, etc. in my shipments? Does that affect the way I fill out a commercial invoice?
Discounting items on commercial invoices can be difficult. You may run into some bumps, including customs not accepting the discount or requiring reconciliation due to your order total being different from your commercial invoice total. Additionally, how you fill out the commercial invoice impacts how customs calculates the final landed cost. For example, if you pre-collect the landed cost, but your commercial invoice is not filled out with accurate information, customs may charge something different than what you initially charged your customer, which could result in you absorbing the extra cost. Therefore, you must know how to accurately apply discounts, promo codes, free shipping, etc., on your commercial invoice to avoid these potential problems.
See Zonospolicies and agreements.
What is an electronic commercial invoice?
An electronic commercial invoice is a paperless trade document that involves a digitized invoicing process; in other words, it is an invoice that is created, sent, and received electronically.
If you’re an importer, exporter, or someone that plays a role in the trade industry, then you are likely aware of commercial invoices, but what about their electronic counterparts? Electronic invoices are becoming more widely used and are sometimes required, so it’s important to be familiar with them. This guide will cover the important aspects of electronic commercial invoices, including the following: