Why Businesses Should Know About Shipping Invoices?  

Have you ordered something online recently? What would happen if you got that delivery late? You would start questioning if the product is really going to arrive and feel like your money is stuck.   

Now, imagine you are a business owner, and your product gets delayed. It means upset customers, revenue losses, and damaged business operations.  

And when your product gets delayed, nobody talks about shipping invoices. Yes, those pieces of paper (or electronic mail) can tell where your money is tied up and why your business is facing a cash flow crunch.  

So, let’s discuss in detail what shipping invoices are and why every business should know about them.   

What are Shipping Invoices?  

Shipping invoices or bills of lading are the ultimate cheat sheet for freight shipments. They’re a legal, accounting-friendly document that breaks down everything about the goods being transported. This includes the type of products, their names, quantities, purchase price, and where they’re headed.   

Once the shipment reaches its destination, this invoice doubles as a receipt. Essentially, it’s a binding agreement between the shipper and the freight provider. This ensures everyone plays by the same rules and nothing gets lost in translation.  

But here’s where it gets even more important: shipping invoices are key to internal controls safeguarding your business. For example, these invoices prevent one person from having unchecked authority over shipping processes—fraud prevention! With clear role separation and a system for tracking assets, shipping invoices can save your business money and pain.   

If all this mumbo jumbo sounds too complicated, let’s break down by an example:   

Imagine a construction company ordering steel beams for a project. The shipping invoice would list every item in detail: “100 steel beams, $50,000 purchase price, shipping to XYZ Construction Site.” As we move forward, we’ll break down what’s included in the shipping invoice.   

If some of you are thinking in reverse and saying, “Why do I need a shipping invoice?” Let’s answer in plain English.   

Firstly, kudos for thinking like that; you are a genius. Secondly, without shipping invoices, a business can overspend, duplicate orders, or their product can be stolen.   

Types of Shipping Invoices   

We have been doing research about our business recently and found that 55% of all invoices issued in the US are paid late. That’s a ridiculous number. Shipping invoices are no exception, and you need to manage them properly. So, how can you? Well, managing your shipping invoices effectively starts with knowing which type fits your business needs. Let’s see what those types are:   

1. Standard Invoice  

Standard invoicing is like the bread and butter of invoicing. This document includes essential details like invoice number, business name, client name, contact information, and the payment owed.  

2. Proforma Invoice  

You can consider the Performa invoice as your preview invoice. It’s a preliminary bill that gives clients an estimate of costs, including shipping volume and transportation fees.   

3. Commercial Invoice  

Commercial invoices play a key role in international trade. They act as a legal contract between supplier and buyer and serve as proof of purchase during maritime freight shipping.  

4. Debit Invoice  

Do you need to collect additional payments or adjust an existing bill? That’s where the debit invoice comes in. A debit invoice asks the buyer to increase the initially mentioned amount.   

5. Credit Invoice  

A credit invoice is the opposite of a Debit invoice. It outlines refunds or credits applied to an existing bill.  

6. Mixed Invoice  

If you have a complicated billing situation like solving trigonometry, you need a mixed invoice. It combines credit and debit charges on a single bill. Though less common for small businesses, it’s handy when managing multiple projects on one invoice.  

What’s Included in Shipping Invoices?  

Ok, so we have covered the types of shipping invoices. Now, we need to answer the question, “What should we add to a shipping invoice?””   

Firstly, you don’t need to be Archimedes to prepare shipping invoices. It’s about providing clear, detailed documentation that ensures your products reach their destination without hiccups.   

Here’s what you should include:  

Recipient’s Name and Contact Information  

Start by listing the recipient’s name or the company name if it’s a business. Be sure to add the point of contact (POC), phone number, email, and physical address to avoid delivery confusion.  

Carrier’s Name and Contact Information  

If only one carrier handles the shipment, include their details. But for shipments involving multiple carriers, list all of them sequentially, beginning with the initial handler.  

Purchase Order Numbers  

Purchase order numbers are crucial for tracking and resolving any shipment issues. They act as an internal tracking tool, ensuring smooth communication and order management.  

Delivery Instructions  

Specify delivery instructions, like contacting the POC upon arrival or adhering to specific delivery timeframes.   

Pick-Up Date  

The pick-up date marks the moment the carrier takes responsibility for your shipment. It’s also a key reference point for tracking progress and estimating delivery time.  

Item Descriptions and Details  

Clearly describe the contents of the shipment. Include details like item names, quantities, per-unit prices, and total value. The more specific, the better.  

Packaging Details  

Outline how the shipment is packed. Is it in pallets, boxes, or containers? This is particularly useful for inventory management and dispute resolution.  

Freight Details  

Include any additional information, such as special handling instructions or a note on hazardous materials. Freight details also play a critical role in customs clearance and tax calculations.  

Here’s what the Shipping Invoice looks like:  

Final Thoughts   

Shipping invoices help you track shipments and protect your business from costly errors. Whether you are in the tech industry or textile, you need to know about shipping invoices and have to know how they work.   

While shipping invoices can track the flow of goods and money, InvoBill helps you tackle the broader picture—your accounts receivable. Think of InvoBill as the solution for making sure your cash flow doesn’t hit a bottleneck and you get paid quickly and painlessly.   

FAQs  

What is the difference between a bill and an invoice?  

A bill is a document from the buyer requesting payment for goods/services already received. On the other hand, an invoice is issued by the seller to request payment and serves as a formal record of the transaction.  

What makes invoicing difficult or time-consuming?  

Invoicing can be difficult and time-consuming due to errors in data entry, tracking multiple payments, and chasing overdue invoices.   

How can I invoice based on partial deliveries?   

To invoice based on partial deliveries, issue a partial invoice for the delivered portion of goods or services. You need to include details of the items delivered, their cost, and reference the remaining balance for future invoices.