What is a consignment invoice?
A consignment invoice is a commercial invoice given by the seller to the buyer in advance of shipment. It is usually used to confirm the price of the goods, shipping costs, estimated taxes, and other related charges. It does not serve as a formal transaction certificate but provides the buyer with detailed information about the goods for payment or transportation arrangements.
Key elements of a consignment invoice
- Sender and recipient information: includes basic information such as name and address.
- Shipping costs: lists the fees payable for the shipment of goods, including freight and surcharges.
- Goods description: a detailed description of the goods being shipped, such as quantity, weight, volume, etc.
- Shipping terms: information about the shipping method, origin, destination, shipping insurance, etc.
- Invoice number: used for tracking and managing invoices.
Purpose of a Consignment Invoice
Cost confirmation: As proof of the cost of transporting goods, confirm the amount of transportation costs paid or payable.
Tax purposes: Can be used as a basis for taxation to ensure compliance.
Cargo transportation records: Provide detailed records of the transportation process for subsequent inquiries and verifications.
When to use a consignment invoice?
A consignment invoice is used before and after the goods are transported, especially when paying freight and confirming costs. Usually, the shipper or carrier uses this document to record and verify costs.
What is a bill of lading?
A bill of lading (B/L) is a transport document issued by the carrier (e.g. an Ocean Freight company) to the shipper. It is proof of the contract for the carriage of goods and usually serves as evidence of ownership of the goods.
Key components of a bill of lading:
- Shipper and consignee information
- Terms and conditions of carriage
- Goods description (quantity, weight, specifications)
- Transport method (e.g. Ocean Freight, Air Freight, etc.)
- Bill of lading number and date of issue
- Name and address of the carrier
- Details of the place of receipt and delivery
The purpose of the bill of lading:
- Proof of ownership of the goods: The bill of lading is proof of ownership of the goods and can be transferred to other parties.
- Basis of the transport contract: The bill of lading is proof of the transport agreement between the transport company and the shipper.
- Proof of customs clearance and collection: At the port of destination, the bill of lading is the only proof that the consignee can use to collect the goods.
When is the bill of lading used?
- During transport: The bill of lading is the official confirmation of the contract for the transport of goods during transport.
- When goods are collected: The consignee or its agent needs the bill of lading to collect the goods from the carrier.
The main differences between a consignment note and a bill of lading are
Functional differences:
- The consignment note is mainly used during the transaction process to provide information about the goods, prices and fees and to help the buyer prepare to pay or handle customs procedures.
- The bill of lading is an official document used during the transportation process to prove ownership of the goods, the contract and the transportation agreement.
Timing of use:
- The consignment note is generally used before the goods are shipped or when transportation arrangements are made to help determine fees and terms.
- The bill of lading is a voucher used to collect the goods after they have been transported.
Legal effect:
- Shipping invoices generally have no legal effect and are used for reference and payment purposes only.
- Shipping bills of lading have legal effect and are legal documents of title that can be exchanged for goods.
Aspects involved:
- Shipping invoices are more concerned with commercial transactions, especially payment and costs.
- Shipping bills of lading are concerned with transport and logistics, especially the transport of goods and the transfer of ownership.
How freight forwarders can simplify the process
Following US Customs rules can sometimes be hard, especially when you have lots of documents and lots of things you need to file. Freight forwarders can help make this process easier. They act as intermediaries.
Freight forwarders must ensure the timely submission of all requisite documentation, thereby mitigating the risk of delays, financial penalties, and other potential disruptions that could impede operational efficiency. In order to comply with US Customs regulations, it is necessary to possess a comprehensive understanding of import legislation, deadlines, and filing procedures.
End-to-end logistics support
In addition to documentation, freight forwarders’ remit encompasses the provision of comprehensive logistics management, including the coordination of transport from origin to destination. They ensure that goods move smoothly through every step of the supply chain, from handling customs clearance and arranging transport to reducing the risks associated with non-compliance.
