Commercial invoice
What a commercial invoice is, what to include, and how to create one for shipments to and from the Philippines.
Published Monday 17 August 2026
Table of contents
Key takeaways
- A commercial invoice is a document used in international trade that describes the goods being shipped, their value, and the parties to the sale, and customs authorities use it to assess duties and taxes.
- In the Philippines, the Bureau of Customs relies on commercial invoices to clear goods entering and leaving the country.
- Key details 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 is required for cross-border shipments and includes customs information that a standard invoice does not.
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 is the primary record customs authorities use to determine the value of imported goods, calculate duties and taxes, and check that shipments comply with trade regulations.
If you sell or buy goods across borders, you will deal with commercial invoices regularly. They are one of several different types of invoices, and they are essential for moving your products between countries and meeting your legal obligations.
What to include on a commercial invoice
A commercial invoice needs enough detail for customs officials to identify what is being shipped, who is sending it, and how much it is worth. At a minimum, 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 Philippine Bureau of Customs (BOC), 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 refused entry.
The invoice also helps authorities confirm 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 itself.
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 unnecessary hold-ups.
- Seller information: your business name, address, Taxpayer Identification Number (TIN), 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, extra inspections, or fines. If the declared value does not 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 are 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 five steps to produce a clear, compliant commercial invoice for your next international shipment.
Step 1: Gather required information
Before you fill in the invoice, collect the details you will 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 mistakes. Check with your freight forwarder or customs broker if you are unsure about the 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 creating a professional invoice with software keeps things consistent and cuts 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.
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, and make sure the HS codes are correct for each item.
Getting invoices right the first time also supports faster payment. A reliable invoicing process, with accurate documents and clear terms, helps keep your payment cycles short.
Step 5: Create copies
Prepare multiple copies of your commercial invoice. You will typically need at least three: 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 the Philippines, the Bureau of Customs requires importers to keep import records for three years from the date duties and taxes are finally paid, under the Customs Modernisation and Tariff Act, while the Bureau of Internal Revenue also sets retention rules for your books of account. Check both agencies' current 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" do not give customs enough information, so use specific descriptions that clearly identify each item
- Entering incorrect HS codes: the wrong Harmonised System code can classify your goods incorrectly, leading to wrong duty rates or shipment holds
- Undervaluing goods: declaring a lower value than the actual transaction price is illegal and is penalised under Philippine customs law, with consequences that can include fines or seizure of goods
- 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 is resolved
Commercial invoice vs regular invoice
Both types of invoice record a transaction between a buyer and seller, but they serve different purposes and carry different information. Knowing the distinction helps you use the right document at the right time.
Here is how they compare:
- Purpose: a regular invoice requests payment for goods or services in a domestic sale, while a commercial invoice acts as a customs declaration for goods crossing international borders
- Required information: a regular invoice usually shows the seller, buyer, items, and total amount, while a commercial invoice adds HS codes, country of origin, Incoterms, and other customs-specific details
- Use cases: you will use a regular invoice for everyday sales within the Philippines, while a commercial invoice is required whenever you export or import physical goods
- Legal requirements: the Bureau of Customs requires commercial invoices for customs clearance, while regular invoices are not submitted to customs authorities
You might also come across proforma invoices. A proforma invoice is a preliminary document sent before a sale is finalised, outlining the expected terms, prices, and goods without being a binding request for payment. Once the sale goes ahead, you replace the proforma invoice with a formal commercial invoice for customs. Keeping all of these documents accurate helps you manage the money customers owe you and reduce payment friction across borders.
Simplify invoicing with Xero
Managing international invoicing alongside your day-to-day bookkeeping takes time. Xero's invoicing tools let you create, send, and track invoices in one place, with automated payment reminders and online payment options that help you stay on top of outstanding amounts.
Whether you are sending a commercial invoice to an overseas buyer or a regular invoice to a local customer, Xero keeps your records organised and helps you keep your cash flow healthy. 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 require a commercial invoice for all cross-border shipments of physical goods. The main exception is documents or items with no commercial value, which 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 authorities at both the origin and destination.
Is a commercial invoice the same as a BIR sales invoice?
No. A BIR sales invoice is a local tax document for sales within the Philippines, while a commercial invoice is used for cross-border shipments and carries customs details such as HS codes and Incoterms. You may need both for an export sale.
Do I need to include a TIN on my commercial invoice?
Including the Taxpayer Identification Number (TIN) issued by the Bureau of Internal Revenue (BIR) is good practice, as it identifies your business for tax purposes and can speed up processing. Always confirm the exact identifiers your buyer's country requires.
What happens if my commercial invoice has errors?
Errors can lead to customs delays, extra inspections, incorrect duty charges, or fines, and in serious cases such as deliberate undervaluation, goods may be seized. 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.