Commercial invoice
A commercial invoice is a document used in international trade to declare goods, values and parties to customs.
Published Monday 22 June 2026
Table of contents
Key takeaways
- A commercial invoice is a legal document used in international trade that details the goods being shipped, their value, and the parties involved in the transaction. Customs authorities use it to assess duties and taxes.
- Accurate commercial invoices help your goods clear customs faster, reduce the risk of delays or penalties, and support shorter payment cycles for your business.
- Key details on a commercial invoice include seller and buyer information, a description of the goods, Harmonised System (HS) codes, the total value, and shipping terms such as Incoterms.
- A commercial invoice differs from a regular invoice because it's specifically required for cross-border shipments and includes customs-related information that a standard invoice doesn't.
What is a commercial invoice?
A commercial invoice is a document that records the details of a sale between a buyer and seller in different countries. It acts as the primary record customs authorities use to determine the value of imported goods, calculate duties and taxes, and verify that shipments comply with trade regulations.
If you sell or buy goods internationally, you'll encounter commercial invoices regularly. They're essential for getting your products across borders smoothly and making sure you meet your legal obligations.
What to include on a commercial invoice
A commercial invoice needs to contain enough detail for customs officials to identify what's being shipped, who's sending it, and how much it's worth. At a minimum, you should include the following information:
- Full names and addresses of both the seller (exporter) and buyer (importer)
- A clear description of each product, including quantity, weight, and unit price
- The Harmonised System (HS) code for each item
- Total invoice value and the currency used
- Shipping terms (Incoterms), country of origin, and port of destination
Why customs needs a commercial invoice
Customs authorities, such as the Australian Border Force (ABF), rely on commercial invoices to assess the correct duties and taxes on imported goods. Without a valid commercial invoice, your shipment can be held at the border, delayed, or even refused entry.
The invoice also helps authorities verify that the goods match the declared description and value. This is different from a Bill of Lading, which serves as proof of ownership and a receipt for the shipped goods rather than a record of the sale itself.
What information goes on a commercial invoice?
A well-prepared commercial invoice covers 5 categories of information. Getting each one right helps your goods clear customs without unnecessary holdups.
- Seller information: your business name, address, Australian Business Number (ABN), and contact details
- Buyer information: the importer's full name, address, and any tax identification numbers required by their country
- Product details: a clear description of each item, including quantity, weight, HS code, and country of manufacture
- Financial information: the unit price and total value for each line item, the currency of the transaction, and any discounts or additional charges
- Shipping details: the Incoterms (such as FOB, CIF, or EXW), the port of loading, the port of destination, and the shipping method
Why accurate information matters
Errors or missing details on a commercial invoice can lead to customs delays, additional inspections, or even fines. If the declared value doesn't match the actual goods, authorities may hold your shipment while they investigate.
Accurate invoices also protect your business financially. When the details are correct from the start, you're less likely to overpay on duties or face disputes with your buyer about what was shipped and at what cost.
How to create a commercial invoice
Follow these 5 steps to produce a clear, compliant commercial invoice for your next international shipment.
Step 1: Gather required information
Before you start filling in the invoice, collect all the details you'll need. This includes your buyer's full name and address, a detailed description of the goods, HS codes, unit prices, and the agreed shipping terms (Incoterms).
Having everything ready upfront saves time and reduces the chance of errors. Check with your freight forwarder or customs broker if you're unsure about specific requirements for your destination country.
Step 2: Choose your format
You can create a commercial invoice using accounting software, a spreadsheet template, or a dedicated trade document tool. Many businesses find that using invoicing software keeps things consistent and reduces manual data entry.
Whatever format you choose, make sure it includes all the required fields and looks professional. A clear, well-organised invoice reflects well on your business.
Step 3: Complete the invoice
Fill in each section carefully. Start with the seller and buyer details, then list each product with its description, quantity, unit price, and HS code. Add the total value, currency, and shipping terms.
Double-check that the product descriptions are specific enough for customs officials to identify the goods. Vague descriptions like "electronics" or "clothing" can trigger delays.
Step 4: Review and verify
Before sending, review every detail on the invoice. Confirm that the values, quantities, and descriptions match your purchase order and packing list. Make sure the HS codes are correct for each item.
Getting invoices right the first time also supports faster payments. According to Xero Small Business Insights, Australian small businesses waited an average of 23.9 days to be paid in the December quarter of 2025, the fastest result since tracking began in 2017. Accurate, well-prepared invoices play a role in keeping payment cycles short.
Step 5: Create copies
Prepare multiple copies of your commercial invoice. You'll typically need at least 3: one for yourself, one for the buyer, and one (or more) for customs at the origin and destination countries.
Keep your copies stored safely for your records. In Australia, you're generally required to keep export records for at least 5 years. Check the Australian Border Force website for current record-keeping requirements.
Common mistakes to avoid
Errors on a commercial invoice can lead to customs delays, fines, or shipment holds. Watch out for these common mistakes.
- Using vague product descriptions: generic terms like "parts" or "samples" don't give customs enough information. Use specific descriptions that clearly identify each item.
- Entering incorrect HS codes: using the wrong Harmonised System code can result in your goods being classified incorrectly, leading to wrong duty rates or shipment holds.
- Undervaluing goods: declaring a lower value than the actual transaction price is illegal and can result in penalties, seizure of goods, or both.
- Leaving information incomplete: missing fields such as the buyer's address, Incoterms, or country of origin give customs a reason to delay your shipment.
- Creating contradictions between documents: if your commercial invoice states one quantity but your packing list states another, customs will flag the discrepancy and may hold your goods until it's resolved.
Commercial invoice vs regular invoice
While both types of invoices record a transaction between a buyer and seller, they serve different purposes and contain different information. Understanding the distinction helps you use the right document at the right time.
Here's how they compare:
- Purpose: a regular invoice requests payment for goods or services in a domestic transaction. A commercial invoice serves as a customs declaration for goods crossing international borders.
- Required information: a regular invoice typically includes the seller, buyer, items, and total amount. A commercial invoice adds HS codes, country of origin, Incoterms, and other customs-specific details.
- Use cases: you'll use a regular invoice for everyday sales within Australia. A commercial invoice is required whenever you export or import physical goods.
- Legal requirements: the Australian Border Force (ABF) requires commercial invoices for customs clearance. Regular invoices aren't submitted to customs authorities.
You might also come across proforma invoices. A proforma invoice is a preliminary document sent before a sale is finalised. It outlines the expected terms, prices, and goods but isn't a binding request for payment. Once the sale goes ahead, you replace the proforma invoice with a formal commercial invoice for customs purposes.
Xero Small Business Insights data from the December quarter of 2025 shows that wholesale trade and manufacturing, industries heavily reliant on commercial invoicing, experienced late payments of 8.8 and 8.7 days respectively, above the 6.6-day national average. Accurate documentation, including well-prepared commercial invoices, can help reduce payment friction across borders.
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FAQs on commercial invoices
Here are some frequently asked questions about commercial invoices.
Do I need a commercial invoice for every international shipment?
Yes, customs authorities require a commercial invoice for all cross-border shipments of physical goods. The only common exception is documents or items with no commercial value, which may use a simplified declaration instead.
Who provides the commercial invoice?
The seller (exporter) is responsible for preparing and providing the commercial invoice. It's included with the shipping documents and submitted to customs authorities at both the origin and destination.
Can I make my own commercial invoice?
Yes, you can create your own commercial invoice using accounting software, a spreadsheet, or a template. You can use any format, as long as your invoice includes all the information customs requires.
Do I need to include an ABN on my commercial invoice?
Including your Australian Business Number (ABN) on a commercial invoice isn't a strict customs requirement, but you should include it. Your ABN identifies your business for tax purposes and can speed up customs processing, especially when dealing with the ABF.
What happens if my commercial invoice has errors?
Errors can lead to customs delays, additional inspections, incorrect duty charges, or fines. In serious cases, such as deliberate undervaluation, goods may be seized. Always review your invoice carefully before shipping.
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Disclaimer
This glossary is for small business owners. The definitions are written with their requirements in mind. More detailed definitions can be found in accounting textbooks or from an accounting professional. Xero does not provide accounting, tax, business or legal advice.