Ensuring your products reach their final destination requires careful planning and attention to detail. To accomplish this, you need to create a thorough shipping invoice — a document that relays vital order details.
Also known as a bill of lading, this invoice ensures the smooth transition of goods from one point to another, in turn promoting inventory accuracy and streamlining vendor relations.
Here’s everything you need to know about creating and properly using these documents.
What’s a bill of lading (shipping invoice)?
A shipping invoice is a legal document that provides key details about a freight shipment. Transport invoice, freight invoice, and shipment receipt are all alternative names for this document.
Carriers issue a bill of lading to the shipper to share essential details about the transported items. At a minimum, the invoice must include:
- Type of goods
- Individual product names
- Each item’s volume
- Items’ destinations
- Items’ purchase prices
Shipping invoice versus commercial invoice
A shipping invoice conveys important shipment information to the carrier so they can facilitate the shipping and delivery process. While a commercial invoice (or bill of sale) also relays important information about a transaction, it’s designed for the buyer, not the carrier.
Most importantly, the commercial invoice identifies when payment is due, typically using terms like “upon receipt” and “net” to do so. Net terms mean payment is due a specified number of days after the buyer receives the invoice. For instance, if you agree to net 30 terms, the buyer has 30 days to pay after receiving the invoice.
Shipping invoice roles
A bill of lading serves three primary purposes:
- Document of title: Proof of ownership over shipped goods
- Receipt of shipped goods: Confirmation that the carrier has received the cargo as described and is responsible for delivering it
- Contract between the shipper and freight carrier: Terms and conditions of goods transportation
A shipping invoice also assists inventory management in industries involving high traffic of goods — like manufacturing, distribution, and field service — because it acts as an archive of essential shipment information to refer back to.
What to include in a bill of lading
To create a shipment receipt, include the following essential information to ensure your products reach their final destination and you gain proper documentation.
Recipient’s name and contact information
Include the recipient’s name and contact information at the top of the document. If your client is a business, put the company name and your point of contact (POC). And provide the recipient’s phone number, email address, and physical address.
Carrier’s name and contact information
Typically, only one carrier will be responsible for the delivery. But if the shipment involves multiple carriers, provide information for all of them. List their details sequentially, starting with the party who’ll pick up the shipment first.
Purchase order numbers
You’ll also need to include your internal tracking or purchase order (PO) numbers for record-keeping purposes. If the carrier or buyer has an issue with the order, they can provide the PO number as a reference. And you can track these numbers in real time to ensure the shipment is released for pickup and accepted upon delivery.
Delivery instructions
Don’t forget to add specific delivery instructions, such as calling the POC upon arrival or delivering before or after a certain time. The goal is to ensure a smooth handoff between the carrier and buyer.
Pick-up date
The pick-up date is the date the carrier receives the products. At this point, they take responsibility for your shipment. Use the pick-up date as a reference point to track the delivery.
Item descriptions and details
Provide clear details about what the order entails, including a description of goods, the quantity of each SKU, a per-unit price, and the total value of each item type.
Packaging details
Packaging details reveal how your order was packed and shipped. For instance, if the order consists of five pallets, include that information in this section.
Freight details
Add any other relevant details, such as special handling instructions or a note that the order contains hazardous materials. This information is factored into tax and duty calculations for the shipment. Carriers also need freight details to bring your order through customs.
Types of shipping invoices
While all shipping invoices should incorporate critical requirements, there are a variety of receipt types depending on a shipment’s conditions and needs. The most common shipping invoice forms include:
- Standard invoice: A standard document that contains the basics outlined above
- Pro-forma invoice: A projected bill of sale given to a client before goods are shipped
- Commercial invoice: A legal contract between a purchaser and supplier for international trade and maritime shipping
- Debit invoice: Proof to collect money from a buyer
- Credit invoice: An outline of an issued refund or credit
- Mixed invoice: A statement of both debit and credit charges
Small businesses will typically use standard, debit, and credit invoices. The other invoice types are more common among larger entities.
How to create a shipping invoice: 7 steps
Here’s a seven-step guide that covers the essentials and best practices required to craft an invoice that covers all the bases.
1. Choose a template or start from scratch
You can create your own invoicing form from scratch or use a preset one. Many inventory and order management solutions include templates, which streamline the invoicing process and ensure consistency across your business. And once you’ve customized a template, creating future invoices is as easy as filling in the blanks.
2. Enter buyer and seller information
Next, add the buyer and seller information. At a minimum, include the following details for both parties:
- Name
- Contact information
- Email address
- Physical address
You can also include supplemental information, such as a link to the buyer’s website. If you notice a discrepancy between a recipient’s billing and shipping addresses, contact the client to verify where they want the goods sent.
3. Include shipment information
Always include the following information in the details section:
- Origin
- Destination
- Pickup date and time
- Invoice number
Every invoice number must be unique, so it’s helpful to implement a sequential numbering system for your invoices.
Also designate a shipping method, which affects your overall costs and the delivery process’s environmental impacts. If you want to prioritize eco-friendly shipping methods, consolidate orders into single shipments, optimize routes, and use ground transportation whenever possible. But if time is of the essence, air freight offers the greatest efficiency.
4. Add a customer reference number
A customer reference number is different from the invoice number. Buyers can use this number to monitor their order status, arrange returns, and ask questions.
Adding a reference number and offering post-purchase support are critical aspects of client management. The easier and more enjoyable it is to do business with your company, the better the odds of earning repeat customers.
5. Decide on payment terms and conditions
Outline agreed-upon payment terms and conditions (something you’d discuss before processing the order and generating the receipt). When adding terms, identify the payment methods you accept, such as cash, card, and check.
6. List shipment items
You’re required to provide a description of everything included in the shipment. In these descriptions, identify the container(s), gross weight, per-unit price, and product quantity. Listing what the order entails allows the carrier and buyer to verify that the invoice matches the goods received.
7. Provide price information
Finally, specify the total amount for the shipment and the commercial value. This figure represents the total cost of shipping. If there are any add-on charges, make sure to factor them into your calculations.
Streamline your inventory journey with Fishbowl
Shipping invoice management is critical to your business’s success. Modernizing the way you create and manage shipping invoices streamlines vendor relations and promotes overall supply chain efficiency. That’s where Fishbowl comes in, offering a smarter, smoother inventory experience.
Fishbowl integrates with QuickBooks, making it easy to generate and send accurate shipping and commercial invoices to relevant parties. Thanks to the platform’s intuitive export feature, you can create custom invoices with your logo in Fishbowl and deliver them straight to your clients from QuickBooks.
Schedule a demo today to experience the power of Fishbowl firsthand.