What Is a Shipping Invoice? Why Is It Important for Your Business?

What Is a Shipping Invoice?

A shipping invoice, also known as a bill of lading, is one of the important shipping documents that covers the details of products that are shipped from one place to another. This is a legal document that every shipping company sends during the freight shipment of goods.

It applies to international shipping and serves as a binding contract between the shipper and the freight carrier. The shipper signed this invoice before sharing it. Once received, the receiver also signs the same. This document represents the product type, quality, quantity, and price.

Purpose of Bill of Lading (Shipping Invoice)

The major purpose of a bill of lading is to represent the details related to the shipment. It provides clear information about the goods being delivered, their quantity, and price. Moreover, it plays a vital role in the following conditions:

1. Goods Ownership Proof

The ownership information should be properly mentioned on the invoice. It should cover the accurate details of the shipper, carrier, and receiver. The clarity in details makes it easy for the receiver to contact the seller in case of any query.

2. Package Details

The shipping invoice also carries details of packages that are being shipped. It can cover the quantity of items, weight, dimension, or any other detail that describes the product. Professionals can also include a total number of packages. These details help the receiver to ensure that the exact products have been received in the correct quantity.

3. Condition of Shipped Goods

The shipping invoice lists all the items that were delivered. Also, companies disclose the condition of the goods on their invoices. This assures the receiver that the goods are received without being missing or damaged.

4. Legal Document

Shipping addresses act as a legal contract that includes shipper, carrier, and receiver details. It also provides terms and conditions for goods transportation.

How To Create a Shipping Invoice?

Creating a shipping invoice is easy with invoicing software like Moon Invoice. By using its 66+ customized invoice templates, it’s quick and easy to add detailed information in less time. Follow the below steps to create an invoice for shipping.

1. Download the Invoice Template

Initially, download the invoice template from Moon Invoice. As the platform offers plenty of formats, you can access the template in Word, Excel, Google Sheets, Google Docs, and PDF formats.

2. Enter Invoice Details

A business owner needs to enter invoice details like invoice number or reference number, invoice date, due date, currency, and shipping method. The invoice number must be unique, which helps track invoices. The due date indicates the final date for making the payment. The shipping method refers to the type of method used for shipping (ground transportation, freight shipping, PO box delivery, etc).

3. Seller and Buyer Details

Professionals need to enter the details (name, address & contact details) of the seller and buyer. These details are useful for both parties to establish smooth communication during the need.

4. Details of Shipping Line Items

In this section, you need to add details about the product that is going to be shipped. The details are related to product type, quality, quantity, product price, and shipment charges.

5. Terms & Conditions

Business owners of logistics businesses should outline every piece of information related to the terms and conditions relevant to the shipping process. You can also mention additional notes if applicable.

What Should a Shipping Invoice/Bill of Lading Include?

The shipping invoice must cover the following information.

• Invoice number or reference number
• Date of Issue
• Due date
• Shipment Type
• Name & physical address of shipper
• Name & physical address of consignee
• Physical Address of Origin to Destination
• Details of Products
• Shipping Terms
• Signature of shipper and receiver

Shipping Invoice Example

Let’s understand the shipping invoice through an example. Suppose a shoe showroom needs men’s footwear and orders the same by releasing a purchase order to the supplier. The supplier packs the shoes and sends the product through cargo, after signing the PO.

Along with the product, the supplier also sends a shipping invoice while attaching a shipping label to the package. This shipping invoice carries all the details as follows:

• Invoice number, date & due date
• Shipper and consignee details
• Details of the origin and final destination
• Product details with quantity and price
• Shipping terms & conditions

Types of Shipping Invoice

There are many types of shipping invoices, but the following types are usually applicable during the process. Every invoice type has its own set of purposes.

1. Standard Invoice

This is the most common type of invoice that covers the information – invoice number, client name with contact information, and business name with contact information.

2. Commercial Invoice

These kinds of invoices are mostly useful for shipment across international borders. This is proof of purchase and acts as a legal contract between seller and buyer.

3. Credit Invoice

Credit invoice presents a credit or refund on an invoice. It also reduces the outstanding balance of the client due to adjustments, return of the goods, billing errors, or applicable discounts.

4. Debit Invoice

Professionals use debit invoices to collect money from clients. It is also useful when changes need to be made to an existing bill. A debit invoice adds to the buyer’s outstanding balance.

5. Pro-Forma Invoice

A proforma invoice is given to the customer prior to shipment. So, it is also known as a projected bill of sale. It outlines the details of the product purchased with its price, quantity, and shipping volume.

6. Mixed Invoice

It is very complicated because a single invoice carries charges for credit and debit. Small businesses often use mixed invoices. It is also applicable to invoicing multiple projects.

Shipping Invoices Versus Commercial Invoices

Shipping invoices and commercial invoices are two important documents in international shipping trade. However, the purpose of both documents is different. Let’s explore shipping invoices vs commercial invoices and find out how shipping invoices vary from commercial invoices.

Shipping Invoice

A shipping invoice is a document that represents the unit price of the transported goods along with transport charges. It also includes insurance costs, transportation, and other shipping-related costs.

Commercial Invoice

A commercial invoice is a detailed bill that outlines the goods sold by the seller to the buyer. It serves as a contract between the two parties and is frequently used by customs authorities during the customs duties process.

Last Words

A shipping invoice is a prime document for the shipping industry and contributes to ensuring the proper shipment of the product. There are multiple types of shipping invoices and you need to select the one which is best suitable for your work.

Also, it is important to create a proper shipment invoice with clear details to avoid confusion. The best way for this is to use invoicing software like Moon Invoice. Streamline your invoicing process with this tool for better shipment. Try it today!

Frequently Asked Questions