A customs invoice, also called a pro forma invoice, is a document that enables the import and export of goods. If you’re thinking – hey, that sounds a lot like a commercial invoice – you’re right.
Commercial invoices and customs invoices serve basically the same purpose: both help cross-border shipments to clear customs. The difference between a customs invoice and a commercial invoice is what type of businesses use them, and why.
Customs invoices are typically used by high-volume importers and exporters. For these businesses, they're a substitute for a commercial invoice, which is only used when final payment is due for goods received. For smaller eCommerce merchants, a customs invoice and a commercial invoice are effectively the same thing – except for in one minor case.
Confused? Not to worry. This blog will define a customs invoice, how it's used, and the differences between customs invoices and commercial invoices.
Looking for help with global commerce? Easyship can put your cross-border commerce on autopilot. We connect merchants like you to our global fulfillment network because we know reliable partners make all the difference. We also offer a free duty and tax calculator to simplify your import processes.
Here’s everything you need to know about customs invoices.
Table of Contents
What is a Customs Invoice?
A customs invoice, also called a pro forma invoice, is used by importers and exporters to declare the value of goods for customs clearance. This paperwork is mandatory because every cross-border shipment must clear customs in the receiving country. Customs authorities refer to this document to assess duties and taxes, if any, on your incoming shipment.
A customs invoice should include all the information necessary for the shipment to clear customs, including:
- The type of imported goods
- Shipping weight
- The value of goods
- Import duty and taxes
How Are Customs Invoices Used?
Customs invoices are used by a variety of parties involved in the import and export process. As mentioned above, customs invoices help customs agents to know and evaluate the contents of an import shipment. But there are also a few other scenarios in which a customs invoice is needed:
Countries may require additional customs clearance documents
A customs invoice may be required by certain countries as a supplemental document to the commercial invoice. Canada, for example, requires you complete a Canadian customs invoice to import certain goods. You’ll need to complete a Canadian customs invoice if your shipment is any of the following:
- Commercial shipment valued at $2,500 CAD or more
- The shipment is subject to duties and taxes
- The shipment is not restricted under HTUSA Chapter 9810 (live animals, etc.)
If you’re importing to Canada, you may use a customs invoice to complete one more step in your customs paperwork checklist. With Easyship, your customs paperwork is generated automatically, so it's no extra effort.
Customs invoices help with high-volume international commerce
For large importers and exporters, a customs invoice is used as a substitute for a commercial invoice.
Say I’m a Chinese manufacturer of smartphone cases. A buyer in the US has agreed to purchase a large quantity of my product that will be shipped via sea freight. Before I ship, I send the buyer a customs invoice. I also include the customs invoice with my freight shipment.
The customs invoice serves two distinct but equally important purposes:
1.) The customs invoice is the customs clearance document.
The customs invoice, much like a commercial invoice, outlines the contents of my freight shipment. Customs authorities use this paperwork to determine if my shipment is allowed to enter the receiving country, plus assess any duties and taxes on my stated goods. Effectively, the customs invoice replaces the commercial invoice invoice as the document for customs clearance.
2.) The customs invoice serves as a bill of sale in advance of the delivery of goods.
The customs invoice is my good-faith estimate of the total cost of the imported goods, including any duties and taxes. Unlike a commercial invoice, a customs invoice isn’t a final request for payment. It’s only an estimate of the valuation of goods intended to be shipped. Both myself and the buyer use this document to satisfy our internal purchase processes as a lead up to receiving the final request for payment.
Here’s why customs invoices are used in global commerce instead of commercial invoices.
Say I run into a manufacturing delay and cannot include all the promised smartphones in my shipment. This is common in global trade. Upon receiving my shipment, and before money changes hands, the buyer will review the shipment for any discrepancies. A commercial invoice is only submitted once we both agree on the exact amount of payment.
Customs invoices allow cross-border businesses without a history of working together to ship and receive goods, and settle the final bill later after everything clears customs with all duty and taxes included.
Global couriers use customs invoices to export and import
Say you’re shipping a hoodie from the US to Germany via DHL. Before your package can be picked up by DHL, you complete paperwork online to purchase the shipping label. DHL uses this completed online paperwork as a customs invoice.
In other words, DHL uses the details you’ve provided about your shipment – weight, value, etc. – to satisfy the paperwork both when it exports your hoodie from the US, and imports it to Germany as well.
In this case, the customs invoice is basically the same as a commercial invoice. As a shipper, you never hear about a customs invoice because you’re not dealing with customs.
1.) A customs invoice helps shipments from importing and exporting businesses to clear customs in both the sending and receiving country.
2.) Customs invoices may be required by certain countries in addition to a commercial invoice.
3.) High-volume international businesses also use customs invoices to satisfy their internal purchase approval processes.
What’s the Difference Between a Customs Invoice and a Commercial Invoice?
A customs invoice is different from a commercial invoice. However, a customs invoice may look exactly the same as a commercial invoice, except for the label of “pro forma” or “customs” at the top.
Smaller online merchants that sell to consumers only use commercial invoices. This is because the customer has already paid for the goods (unlike with large shipments that are paid for upon receipt).
The commercial invoice is included with the purchased goods, and this serves as the customs documentation. Customs officers use the commercial invoice to assess and duty and taxes owed for the specific shipment.
A commercial invoice contains information like the item price, the harmonized system (HS) code, the item value, and quantity of goods sold. With Easyship, you can automatically generate your commercial invoices for all shipments in seconds.
When a shipment contains goods for sale, a customs invoice is processed as a commercial invoice. This means that, in most cases, a customs invoice is a stand-in for a commercial invoice. But in some countries, like Canada, they may be a supplemental document required for importing.
Customs invoices are typically used by businesses that import or export high volumes of goods via freight, or deal with other large businesses. As mentioned above, customs invoices are an estimated bill of sale, and serve as a finalizing document for high-value transactions that must arrive from another country, and may incur extra costs along the way.
Large importers and exporters can use a commercial invoice instead of a customs invoice, though it’s less common. This is because sometimes what's shipped differs from what’s quoted on the invoice.
The customs invoice includes all the necessary information to clear customs, just like a commercial invoice. The customs agents in the receiving country review the shipment details to determine whether any duty and taxes are due, and if the shipment is allowed per the shipping restrictions in the country.
How To Generate a Customs Invoice Online with Easyship
Whenever you create a shipment in Easyship, your customs invoice/commercial invoice (whichever is applicable), your packing slip, and shipping label will be automatically generated for you.
A customs invoice doesn’t have to follow any exact presentation to be valid. What is crucial, though, is that it contain certain information, including:
- Contact information for sender and receiver
- Tax ID and VAT number for sender and receiver
- Inventory of contents
- Number of items
- Value of item (s)
- Country of origin
- Reason for import/export
- Tariff code
- A description of each object
Most of this information will auto-populate in Easyship based on the order information provided by the customer at checkout, as well as your default shipping settings in Easyship. With your document ready, the next step is to prepare it for printing.
Visit the “Manage Shipments” section in your Dashboard and click the “To Download” button. This is where you’ll find all your completed shipping documents.
From here, you’ll arrive at the “Generate Documents” screen. Simply select the ready documents, click through to the Printing page, and click Print. Now all that’s left to do is attach your customs invoice to your shipment and you’re done!
How Easyship Can Help
Customs paperwork can be a headache. Customs invoices are a variation on a commercial invoice that’s used most often by large-scale freight importers and exporters. For smaller merchants, a commercial invoice is all you need to clear customs and engage in global commerce. (Except, perhaps, in Canada).
Easyship puts your customs paperwork on autopilot. From our free duty and tax calculator to our auto-generated customs paperwork, we help you save time (and brain cells) when it comes to international shipping.
You’ll save up to 70% on every shipment when you use Easyship to buy your shipping labels. Feel free to create a free account and start saving today.
If you found this article valuable, you might want to check out the following:
- What are the Main Shipping Documents?
- Shipping Glossary
- DDU vs DDP - Understanding the differences in Terms of Shipping
Customs Invoices FAQ
Is a commercial invoice the same as a customs invoice?
For smaller merchants, yes. A commercial invoice is all that’s needed to clear customs and engage in global commerce. In other words, a customs invoice is a commercial invoice for smaller merchants. However, in Canada, a customs invoice may be required in addition to a commercial invoice.
For large-scale freight importers and exporters, a customs invoice is not a commercial invoice. Instead, a customs invoice is used as a stand-in for a commercial invoice. It allows a shipment to clear customs without being a final request for payment.