Commercial invoice
Learn what a commercial invoice is, what to include, and how to prepare one for cross-border shipping.
Published Thursday 6 August 2026
Table of contents
Key takeaways
- A commercial invoice is a document used in international trade that records the goods being shipped, their value, and the buyer and seller. Customs authorities use it to clear goods across the border.
- Hong Kong is a free port, so most goods carry no customs tariff, but you still need a commercial invoice to support your import or export declaration.
- Key details include the seller, buyer and consignee, a clear description of the goods, Harmonised System (HS) codes, the total value and currency, and shipping terms such as Incoterms.
- A commercial invoice differs from a regular invoice because it is prepared for cross-border shipments and carries the customs information a standard invoice leaves out.
What is a commercial invoice?
A commercial invoice is a document that records the details of a sale between a buyer and a seller in different countries. It is the main record customs authorities use to identify imported or exported goods, work out any duty, and check that a shipment matches what has been declared.
If you buy or sell goods across borders, you will meet commercial invoices often. They help your products move through customs smoothly and keep you on the right side of your legal obligations.
What to include on a commercial invoice
A commercial invoice needs enough detail for customs officers to see what is being shipped, who is sending it, and what it is worth. At a minimum, include the following:
- Full names and addresses of the seller (exporter) and the buyer (importer)
- A clear description of each product, including quantity, weight, and unit price
- The Harmonised System (HS) code for each item
- The 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 Hong Kong's Customs and Excise Department, use commercial invoices to identify goods and confirm their value. Hong Kong is a free port and charges no customs tariff on most imports and exports, with excise duty applying only to liquor, tobacco, hydrocarbon oil, and methyl alcohol. Even so, a valid commercial invoice is still needed to support your import or export declaration, and a missing or unclear one can hold your shipment at the border.
The invoice also lets authorities check that the goods match the declared description and value. That is different from a bill of lading, which is proof of ownership and a receipt for the shipped goods rather than a record of the sale.
When is a commercial invoice required?
You need a commercial invoice whenever you ship physical goods across a border for sale. In Hong Kong, anyone importing or exporting non-exempt goods must lodge an accurate import or export declaration within 14 days of the shipment, and the commercial invoice is a key supporting document for it.
Low-value items, gifts, and documents with no commercial value are sometimes handled with a simpler declaration, but check the rules for your destination country before you ship.
What information goes on a commercial invoice?
A well-prepared commercial invoice covers five categories of information. Getting each one right helps your goods clear customs without hold-ups.
- Seller information: your business name, address, Business Registration Number (BRN), and contact details
- Buyer and consignee information: the importer's name and address, the consignee receiving the goods if different, and any tax identification numbers their country requires
- 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, the currency, and any discounts or extra charges
- Shipping details: the Incoterms (such as FOB, CIF, or EXW), the port of loading, the port of destination, and the shipping method
Seller, buyer, and consignee details
Name the parties in full. In Hong Kong your business is identified by its Business Registration Number (BRN), the eight-digit number issued by the Inland Revenue Department, which is the local equivalent of a tax or company registration number used elsewhere. Show the buyer who is paying for the goods, and name the consignee separately when someone else is receiving the shipment, so customs can match the paperwork to the delivery.
HS codes, Incoterms, and country of origin
Three fields do most of the work at customs, so give them extra care.
- HS codes: Hong Kong uses the Hong Kong Harmonised System, an eight-digit code where the first six digits match the international standard. The right code tells customs exactly what you are shipping and whether any duty or control applies.
- Incoterms: these set out who pays for freight and insurance and who carries the risk at each stage, using standard terms such as EXW, FOB, and CIF.
- Country of origin: this is where the goods were made, not where they were shipped from, and it can affect duty in the destination country.
Why accurate information matters
Errors or missing details can lead to customs delays, extra inspections, or fines. If the declared value does not match the goods, authorities may hold the shipment while they investigate. Many carriers also expect the invoice to be signed and prepared in English or Chinese, both of which are accepted in Hong Kong.
Accurate invoices protect your finances too. When the details are right from the start, you are less likely to overpay on duty or fall into a dispute with your buyer over what was shipped and at what cost.
How to create a commercial invoice
Follow these five steps to produce a clear, compliant commercial invoice for your next international shipment. For a wider view of billing, see Xero's guide to invoicing.
Step 1: gather required information
Before you fill anything in, collect the details you need: the buyer's full name and address, a description of the goods, HS codes, unit prices, and the agreed Incoterms.
Having everything ready upfront saves time and cuts down on errors. Check with your freight forwarder or customs broker if you are unsure about requirements for your destination country.
Step 2: choose your format
You can create a commercial invoice with accounting software, a spreadsheet template, or a dedicated trade document tool. Tools that let you create and send invoices in one place keep things consistent and reduce manual data entry.
Whatever format you choose, make sure it includes every required field 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.
Check that the product descriptions are specific enough for customs officers to identify the goods. Vague descriptions like "electronics" or "clothing" can trigger delays.
Step 4: review and verify
Before you send, review every detail. Confirm that the values, quantities, and descriptions match your purchase order and packing list, and make sure the HS codes are correct for each item. If a bank or letter of credit is involved, check that the invoice matches those documents too.
Getting the invoice right the first time helps your shipment clear customs without hold-ups and keeps your payment terms on track.
Step 5: create copies
Prepare several copies of your commercial invoice. You will usually need at least three: one for yourself, one for the buyer, and one for customs.
Store your copies safely. In Hong Kong you must keep business records for at least seven years under the Inland Revenue Ordinance, so keep invoices with the rest of your accounts receivable records.
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" do not tell customs enough, so describe each item clearly
- Entering the wrong HS code: the wrong code can misclassify your goods and lead to incorrect duty or a shipment hold
- Undervaluing goods: declaring less than the real transaction price is illegal and can lead to penalties or seizure, and it applies even to samples, gifts, and returns, which still have a value
- Leaving information incomplete: missing fields such as the buyer's address, Incoterms, or country of origin give customs a reason to delay your shipment
- Contradicting other documents: if the invoice and the packing list disagree on quantity, customs will flag it and may hold the goods until it is resolved
Commercial invoice vs other documents
Several trade documents look similar but do different jobs. Knowing which is which helps you use the right one at the right time.
Commercial invoice vs regular invoice
A regular invoice requests payment for goods or services, usually for everyday sales within Hong Kong. A commercial invoice does that too, but it also acts as a customs record for goods crossing a border, so it adds HS codes, country of origin, Incoterms, and other customs details that a standard invoice leaves out.
Commercial invoice vs proforma invoice
A proforma invoice is a preliminary document sent before a sale is final. It sets out the expected terms, prices, and goods, but it is not a binding request for payment. Once the sale goes ahead, you replace it with a commercial invoice for customs purposes.
Commercial invoice vs packing list
A packing list details how a shipment is physically packed: the number of cartons, weights, and dimensions. The commercial invoice records the value and the commercial terms of the sale. Customs often checks the two against each other, so the quantities must agree.
Simplify your invoicing with Xero
Managing international invoicing alongside your day-to-day books takes time. Xero's invoicing tools let you create, send, and track invoices from one place, with automated reminders and online payment options that help you stay on top of what you are owed.
Whether you are sending a commercial invoice to an overseas buyer or a regular invoice to a local customer, Xero keeps your records organised. Start today and get one month free.
FAQs on commercial invoices
Here are answers to some common questions about commercial invoices.
Do I need a commercial invoice for every international shipment?
Yes, customs authorities expect a commercial invoice for cross-border shipments of physical goods. Items with no commercial value, such as documents, may use a simplified declaration instead.
Who provides the commercial invoice?
The seller, or exporter, prepares and provides the commercial invoice. It travels with the shipping documents and is submitted to customs at both the origin and the destination.
How many copies of a commercial invoice do I need?
Three copies is the usual convention: one for you, one for the buyer, and one for customs. Many carriers now accept electronic copies through their paperless trade options.
Does a commercial invoice need to be signed?
Many carriers and customs authorities expect the exporter to sign the commercial invoice, and an unsigned one can slow clearance. Sign each copy before it ships.
What happens if my commercial invoice has errors?
Errors can lead to delays, extra inspections, incorrect duty, or fines, and deliberate undervaluation can result in seized goods. Review the invoice carefully before you ship.
Related terms
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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.