Commercial Export Invoice: What is it and how is it made?

If you are starting a business relationship with a U.S. company or with any other foreign country, one of the most important documents to support the sale will be the commercial export invoice.

What is a commercial export invoice?

The commercial export invoice is a mandatory legal document that the exporter issues to the importer, stipulating the complete operational process of a sale or transfer of goods.

It includes information such as the type of cargo, product details, importer and exporter data, taxes and tariffs – the well-known dutiable/incremental expenses, and the routes through which the product travels from its point of origin to its final destination: land, sea, and/or air transport.

As with any invoice, it also includes information such as the order price, the quantity of merchandise exchanged, and the costs associated with the export.

It also includes the INCOTERM, which basically determines the exact moment when the transfer of ownership and liability occurs. These are some of the INCOTERMS compatible with factoring:

• FOB: Free On Board

• CIF: Cost, Insurance & Freight

• CPT: Cost Paid To

• CIP: Carrier & Insurance Paid To

• DPU: Delivered At Place Unloaded

• DAP: Delivered At Place

• DDP: Delivered Duty Paid

• CFR: Cost & Freight

You can learn more about the role of INCOTERMS and their characteristics in this article published by AJR, a Mexican foreign trade company.

What purpose does the commercial export invoice serve?

Beyond being a mandatory document for every export, let's see exactly what this document is used for.

• It will be requested in every customs process. Without this document, you will not be able to complete the customs clearance process.

• On a legal level, this is the document that truly validates the transaction of your sale to a customer.

• It validates at the operational level in the port that the merchandise is ready to be shipped and confirms the details of the transport document: air (Air Waybill), sea (Sea Waybill), or land (Bill of Lading).

• Once at the destination, the commercial export invoice certifies the type of commercialization of the products.

• On a financial and accounting level, it provides an overview of tariff costs, the transaction currency, and the exchange rate used in the document.

• The document also reflects the payment terms negotiated in the transaction; this information allows the exporter to determine whether the goods will be paid in deferred installments (negotiated credit) or in a single payment subject to the negotiated INCOTERM.

Types of commercial export invoices

It is important that you know about the existence of different types of commercial export invoices. They vary in the nature of their use and the terms of use for each.

Electronic invoice without commercial value

It is typically used when exporting goods to be used as part of a one-time promotion or as a sample. In other words, they will usually not be available for the general public to purchase.

Electronic invoice for consignment exports

‍It is used for exports where it is said that "there is no transfer of ownership," meaning that the recipient cannot sell them to a third party.

Electronic invoice for the transfer of plastic containers

These are used to commercialize plastic containers with packaging or receptacles used to transport products.

Proforma invoice or CFDI

It is a document without accounting value that is used in customs operations to report the data that will be contained in the Digital Tax Receipt (CFDI). It is a kind of pre-invoice that the exporter sends to the importer to inform them about the pricing details and the payment method.

What information do you need to include on a commercial export invoice?

Although we already saw an approximate idea of the information it includes, let's look in detail at the data that makes up this document:

• Invoice number

• Date of issue

• Exporting company details (name, address, and contact number)

• Buyer/importer details

• Country of origin

• Country of destination

• Voyage number and details of the transport document

• Port of loading

• Port of destination

• Description of the merchandise (names, brands, quantities, weight, measurements)

• Price of each of the items

• Currency used

• INCOTERMS of the transaction

• Signature of the person issuing the invoice

• Purchase order attachment

• The corresponding bill of lading or consignment note

What does the format of a commercial export invoice look like?

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1. Header

Invoices usually have a header that identifies the company. It serves to provide the exporting company's details, while also helping the buyer easily identify who the commercial export invoice belongs to. Adding a logo makes recognition even easier.

2. Customer details

The buyer's details must also be included on the invoice. In addition to identifying the company by name, legal name, and tax ID (RFC), it formalizes who exactly the buyer is.

We suggest adding contact information and an address, as this helps facilitate communication for any of the parties that may need to reach out.

3. Order and merchandise details

Not all invoices include all the information about the purchase order, but it is usually very helpful for the exporter's organization. This makes it very easy to access information regarding which order corresponds to which customer and payment.

The same applies to the merchandise details. It helps with easier order management because it allows direct access to that information. However, it must be said that not all invoices necessarily include this information.

4. Price, duties, and taxes

The order amount must be included. Typically, a breakdown is added showing how the order is composed in terms of quantities by unit weight.

Once a subtotal is calculated, it specifies which taxes must be paid and the total amount of the sum of the subtotal plus taxes.

You have already issued the invoice. Now it's time to collect payment.

A well-prepared document does not guarantee timely payment. The time between when you invoice and when the money arrives depends on other things: the account where the payment lands, the currency, and reconciliation.

We explain it here: How to collect an export invoice to the United States.