An export invoice is something that matters the most when it comes to foreign trade. But, what is an export invoice? An export invoice is a document that contains a description of the goods or services that are offered by an exporter and the amount that needs to be paid by the importer.
An export invoice is a document that has been reviewed by the freight forwarder, an insurance company, a transporter, customs officers, and also by any international banker. This type of invoice acts as a sales bill. Moreover, it can be issued only when an importer places the order.
Now, we already know that an export invoice is the most significant document required to perform international trade. But, are you aware that there must be some important things that must be included in the invoice to make it valid? Here, in this blog, we are guiding you through what must be included in an export invoice and why it is necessary.
What should you include in an export invoice?
There are a lot of vital things that must be included in an export invoice. They are:
Date and number of invoice
These are two essential components that must be placed while making an export invoice. As an exporter, you should always remember to put the correct date and number.
Whenever an exporter is performing an export business, they must provide the invoice number for ease of reference.
Name and address of the buyer
An export invoice must include the correct name and address of the importer. This is important because a customs officer will ask for these basic details of the buyer to carry forward the export process.
Reference number
Another important element of an export invoice is the reference number of the buyer. This number is required for easy access to the goods.
Mode of payment
An export invoice must include the mode of payment. This is very essential because if a payment gets due, the buyer will be notified through the invoice details.
International sales term
International sales term refers to a document where details of the party are specified and it is liable for the cargo along with the information of transfer of goods or products to the buyers from sellers of the goods. It is also known as the international sales term.
Product description, unit cost, quantity, and the total shipping cost
An export invoice must contain a description of the products that are being exported. It includes the type of products, price per product, number code, and the overall amount of the goods that are to be exported.
HTS (Harmonized Tariff Schedule) classification number
HTS defines the first 6-digit number of the schedule-B. It stands for Schedule-Initial B’s six-digit number. The HTS classification number is essential for the smooth flow of the shipping process.
Export goods country of origin
The export invoice of your goods must include the country of origin of the products. It is important because customs duty will be placed on the exports based on the country of origin and where it is to be shipped.
Mode of transportation
The transportation mode describes all the details related to the shipping of the items. This must also be mentioned correctly in your invoice.
Invoice currency
The currency of the invoice is very essential. Let us better understand this with an example.
If the payment is made for the USA, then US dollars must be mentioned in your export invoice. On the other hand, if it is in India, the currency must be mentioned as rupees.
Another important thing to be included here is the ISO code. It must be referred to for the currency code. Doing this will eventually make your process of payment simple and easy.
Type of Insurance
Insurance coverage is highly essential when it comes to making an invoice. This enables the purchasers to which party will be responsible for the loss or damage of the goods or products in any unfortunate circumstances.
Signature
The last but most vital element of an export invoice is the signature from both exporters and purchasers. Signing the document acts as proof that both parties are agreeing to the terms & conditions that have been mentioned clearly in the agreement.
Conclusion
A commercial invoice is a formal document that is mandatory to ensure smooth trade between exporters and purchasers. It serves as proof that transactions between the exporter and the client have taken place. It also acts as an important document for the government to determine the real value of the products and calculate the taxes that need to be applied on these products.
In order to know more about export invoices and their necessity, you can consult with a well-known and reliable DGFT consultant. They will provide you with the best guidance when it comes to any topic related to import-export businesses.
Author’s Bio:
Mr. Mehul Goyal is a professional DGFT Guru – DGFT consultant with experience of more than 30 years and specialised in the field and is offering DGFT Consulting Services all over India. He is working with many importers and exporters even before DGFT was instigated in the markets.
