Commerce is the movement of goods from producers to consumers. Logistics and finance are two different but equally important components within this commercial process that ensure a satisfied customer and a profitable manufacturer. Documentation for each of these functions fulfills a specific need within the transaction to ensure a successful outcome for both parties. A shipping invoice moves the product along to destination, while a commercial invoice allows the manufacturer to bill the customer for the product.
The business term for a shipping invoice is a bill of lading. The BOL provides the necessary information for a carrier to schedule pick-up and delivery of the goods to your customer. Information required on a BOL includes:
- the ship-to (consignee) address
- product name
- gross and net weights
- hazardous or special handling information based on the product requirements.
If the product is loaded into a container, tank or rail car, the equipment number also should be noted on the BOL. The BOL should be signed by the carrier when the cargo is picked up and then signed for by the consignee once delivery is made.
A commercial invoice, or bill of sale, is a financial document created for billing purposes. This document must include the name and address of the bill-to party, as well as the product name and quantity. The major difference between a commercial invoice and a shipping invoice is that pricing must be noted on the commercial invoice. The invoice also must note any freight charges, special packaging fees, insurance costs, or other items that are to be paid by the customer. The commercial invoice should include an address where payment should be directed, and a due date for the payment.
Additional Sale Documents
Once a commercial invoice is processed it will be posted to the customer’s account until payment is received at which time payment will be applied and the open invoice closed. If the consignee elects to return the product, a credit note is then created and posted to the customer's account. An account statement also may be created for the customer, providing a list of all open sales documents.