Avoid these commercial invoice pitfalls and keep your goods moving
If you have ever needed to freight goods to an overseas customer then you will have filled out a commercial invoice. Completing a commercial invoice can be a daunting process for anyone, even if they have a lot of experience.
Mistakes can potentially cause delays at the border crossing for your consignment which in turn will cost you money, so it is vitally important to fill out the invoice correctly and that brings pressure.
We have prepared a quick guide of the 5 most common mistakes that businesses make when filling in commercial invoices so that you can avoid making them yourselves and keep your goods moving.
Every item being imported or exported needs to have a 10 digit commodity or Harmonized System (HS) code. For importing to the UK the codes can be checked here.
Companies must use the full 10 digits for importing and exporting and the full code will need to be checked rather than using 0’s to fill in blanks which had been common practice.
Not including incoterms
Incoterms are a set of internationally recognised rules which is used to describe who is responsible for managing different parts of the transport. This includes whether the buyer or the seller handles the shipping, customs clearance, insurance, and documentation.
These are all denoted by a 3 letter acronym. For instance, “Delivered Duty Paid” becomes “DDP” and that means that the consignee, or business which is sending the goods, will be responsible for all duty and VAT.
To learn more then please visit our incoterms page.
Customs authorities will use these to determine who to hold accountable for the clearance, duty and paperwork.
Packing details
Each type of item needs its own line on the invoice with a quantity, a clear description of the product, the net weight and the gross weight.
The description does not need to go into details but does need to describe what the product is.
The net weight is the product without the packaging weight or tare or and the gross weight is the total weight.
Always include the number of packages on the consignments as well as the total pallet count.
REX number & country of origin missing
Any business which wants to import goods into the UK without automatically paying duty will need to apply for a REX Number. This will be up to 35 digits with numbers and letters and will have reference to the country that issued it. European businesses often forget to apply for REX numbers as they are not used on other European exports.
Every commercial invoice needs to reference the country that the goods originated from which will determine the “economic nationality” of the goods.
Customs authorities need this to ensure that the correct duties are being applied depending on the trading relationship between the sending and receiving countries.
If the goods come from a country which has “preferential origin” such as those in the EU then always include a preferential origin statement which is worded like this:
“The exporter of the products covered by this document (export reference REX Number ******************************) declares that, except where otherwise clearly indicated these products are of COUNTRY preferential origin.”
It is not enough to say “EU” origin, the individual country will have to be stated and if goods were produced in different places, then they will have their origin declared individually.
Consignee full details
Another consistent mistake is not including all the details for the business which will be receiving the goods or consignee. Having contact details will ensure that the receiving party is contactable if there are any problems or customs queries.
The Economic Operators Registration and Identification or EORI number is the most common piece of information that is missed. All businesses that want to export or import will need to apply for an EORI and will need to have that number listed on all commercial invoices.
Another important piece of information is the VAT number if the incoterm used references that VAT will be paid by the consignee such as DAP.
If you would like to know more please visit our new page devoted to Commercial invoices which includes guides and FAQs and advice on what to do if things go wrong.
Please explore the rest of our site as there is a wealth of information available to help see you through the complex world of imports and exports .
If you would like to know more about any of the subjects discussed then please contact one of our experienced account managers who can give you a more in depth explanation.
