Commercial Documents: Everything You Need to Know
Commercial documents are written records of commercial transactions describing various aspects of those transactions.3 min read
2. Crucial Component of a Successful International Business Transaction
Commercial documents are written records of commercial transactions describing various aspects of those transactions. They may include orders, invoices, shipping documents, transport papers, and certificates of origin.
International trade in particular requires a lot of documentation, such as commercial documents, financial documents, transport documents, insurance documents, and other international trade-related documents. While the number of documents involved in international trade is high, most of them are rather common.
Common Import/Export Commercial Documents
- Quotation - an offer to sell goods, clearly outlining the price, quality details, quantities, terms of the trade, delivery, and payment terms. The exporter must prepare this document.
- Sales contract - an agreement between the exporter and importer. This should stipulate all the details of the transaction. Both parties must prepare this document. It's important to note that the sales contract is a legally binding document. Therefore, it is wise to seek legal counsel before signing anything.
- Pro forma invoice - an invoice created by the supplier before the merchandise is shipped. This will inform the buyer of the types and quantities of goods that need to be shipped, along with their value and specifications, i.e., size, weight, and dimensions. The exporter must prepare this document.
- Commercial invoice - a formal demand note requesting payment from the exporter to the importer for all items sold under the agreed-upon sales contract. This invoice should provide details pertaining to the goods and payment/trade terms. A commercial invoice is often used to clear Customs and is sometimes needed by the importer for foreign exchange purposes.
- Packing list - a list containing detailed packing information regarding the goods shipped. The exporter must prepare this document.
- Inspection certificate - a report created by an independent surveyor, inspection company, or exporter regarding the specifications of the shipment. This will include things like quantity, quality, and price. Certain countries and buyers will require this certificate. Either the exporter or an inspection company must prepare this document.
- Insurance policy - a document for insurance that details the coverage and confirms that insurance has been taken out. Either the insurer or an insurance agent must prepare this document.
- Insurance certificate - a document that certifies that the shipment is insured under an open policy and will cover any loss or damage to the goods in transit. Either the insurer or an insurance agent must prepare this document.
- Product testing certificate - a document that certifies the products meet specified international and national technical standards, including quality and safety. An accredited laboratory must prepare this document.
- Health certificate - a document that certifies compliance with legislation in the exporter's country. This pertains to agricultural or food products. It certifies that the products were in good condition at the time of the inspection and able to be consumed by humans. Either the exporter or inspection authority must prepare this document.
- Phytosanitary certificate - a document stating that any plants or planting materials are free from pests and disease. This is often required for international trade.
- Fumigation certificate - a certificate that guarantees that the products underwent fumigation and quarantine prior to shipping. Typically, the United States, Canada, the United Kingdom, Australia, and New Zealand require this for any solid wood packing material coming from the Chinese mainland or Hong Kong. Either the exporter or an inspection company must prepare this document.
- ATA carnet - a document that obtains a duty-free/temporary admission of goods. Examples include an exhibit for a trade show, samples, or professional equipment. The exporter must prepare this document.
- Consular invoice - a document outlining shipment information, including a consignee, consignor, and value descriptions. This will need to be certified by the consulate of the importing country stationed in foreign territory. Customs officials will use this document to verify the nature of the shipment, including value and quantity. The exporter must prepare this document.
Crucial Component of a Successful International Business Transaction
There is one crucial component of every successful business transaction: the accurate completion of all required documentation for both imports and exports. Failure to be complete and thorough will slow down the dispatch of your products and their receipt by your customers.
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