Payments
Eight invoice mistakes that hold up your export payments
Small mismatches on the export invoice delay bank payments, hold GST refunds and stop cargo at customs. Here is what each one costs, and what to ask your team.
Contents
- You will not see these mistakes. You will see the result: a payment that arrives weeks late, a refund that never comes, or a container that misses its vessel.
- Almost every one is a mismatch between the invoice and another document. Experience does not prevent them, because they come from last-minute changes and old templates.
- You do not need to check invoices yourself. You need to ask your team five questions. They are at the end.
What a wrong invoice costs you
Your team prepares hundreds of invoices a year. Most are fine. The few that are not cost you in three ways.
Your payment is delayed. Under a letter of credit, the bank checks your documents against the credit and against each other. One difference is a discrepancy. The bank charges a fee, and your money waits until the buyer agrees to accept the documents. During that time you are funding the shipment from your own working capital.
Your refund or incentive is held. Customs matches the invoice on your shipping bill with the invoice in your GST return. If they differ, your IGST refund stops. A wrong HS code can also reduce your duty drawback or RoDTEP.
Your cargo waits. A query from customs about value or description can cost you the vessel, and sometimes the buyer's trust.
None of these appears as a line in your accounts called "invoice mistakes". They show up as slow collections, bank charges and refunds that are "under process".
The eight mistakes
Plot 14, MIDC Chakan, Pune 410501 · IEC 0000000000 · GSTIN 27AAAAA0000A1Z5
| Marks and packages | 3Description | 4HS code | 5Qty and weight | 6Amount (USD) |
|---|---|---|---|---|
| NN/0142/1-48 · 48 drums | Ashwagandha root extract | 1302 19 90 | 1,200 kg net · 1,318 kg gross | 58,800.00 |
8Supply meant for export under LUT without payment of integrated tax. We declare that this invoice shows the actual price of the goods described and that all particulars are true and correct.
1. Port names that differ between documents
"Nhava Sheva" on the invoice, "JNPT" on the bill of lading. Same port, different words.
What it costs youa discrepancy under a letter of credit, and a delayed payment.
Ask your team"Do we copy port names from the letter of credit and the booking, word for word?"
2. Incoterms without a place, or freight not shown separately
"CIF" instead of "CIF Hamburg". Or a CIF invoice that does not show FOB value, freight and insurance as separate figures.
What it costs youthe FOB value on your shipping bill may be wrong, which affects your incentives and your records with the bank.
Ask your team"On CIF and CFR invoices, do we always show FOB value, freight and insurance separately?"
3. A description of goods that differs from the letter of credit
Someone tidies the wording or adds a trade name.
What it costs youone of the most common discrepancies banks raise.
Ask your team"Do we copy the description from the letter of credit exactly?"
4. An HS code that differs from the shipping bill
The invoice shows one code and your CHA files another.
What it costs youa different drawback or RoDTEP rate, and questions from customs on both sides.
Ask your team"Do we keep one HS code for each product, and does our CHA use the same one?"
5. Weights and quantities that do not match the packing list
The invoice was made when the order came in. The goods were weighed later, and only the packing list was updated.
What it costs youthe most common mismatch of all. It causes bank discrepancies and customs queries.
Ask your team"Do we issue the invoice and the packing list together, after final weighing?"
6. Totals that do not add up, or exceed the letter of credit
A typed total, a total in words that does not match, or an invoice value above the credit amount.
What it costs youthe bank can refuse the documents.
Ask your team"Are totals calculated or typed? Who checks the invoice value against the letter of credit balance?"
7. An invoice number that differs between the shipping bill and the GST return
A missing prefix or a slash is enough.
What it costs youyour IGST refund is held until the mismatch is corrected. Many exporters have money stuck for this one reason.
Ask your team"How many of our refunds are pending today, and how many are because of an invoice mismatch?"
8. A missing or wrong GST declaration
The invoice must state whether the export is under a Letter of Undertaking or on payment of IGST.
What it costs youtrouble at refund time, and questions in a GST audit.
Ask your team"Is the declaration added automatically, or does someone type it each time?"
The real cause: a process that depends on memory
Look at where these mistakes come from. Someone opens last month's invoice for the same buyer, changes what they remember to change, and saves it with a new number. The vessel changes, the weights change, and one document is updated but not the others.
Your team may be experienced and careful. The method is the problem. It relies on one or two people remembering every change on every shipment. It works until that person is on leave, or the volume grows, or a new buyer asks for a different format.
How Expodite helps. Expodite keeps each shipment as one record. The invoice, packing list, certificate of origin and bank documents are all filled from it, so ports, HS codes, weights and totals match on every document. When something changes, your team updates the shipment once and reissues the set.
See how export documentation software worksFive questions to ask this week
- How many payments in the last 12 months were delayed by a bank discrepancy, and what did we pay in discrepancy fees?
- How much IGST refund, drawback and RoDTEP is pending today, and why?
- If our documentation head is away for a month, who prepares the documents, and from what?
- When a shipment detail changes, how many files does someone have to edit?
- Does anyone check a document set against the letter of credit before it goes to the bank?
If the answers are slow to come, or come from one person's memory, that is your finding.
Quick answers
- Why are my export payments delayed under a letter of credit?
- Usually because the bank found a discrepancy: a difference between your documents and the credit, or between two of your documents. The bank charges a fee and waits for the buyer to accept before it pays.
- Why is my IGST refund on exports stuck?
- A common reason is that the invoice number or date on the shipping bill does not match the invoice in your GST return. Ask your CHA and chartered accountant to check and correct it.
- How do I reduce export documentation errors without hiring more people?
- Stop preparing each document separately. Keep the shipment details in one place and produce every document from it, so a change is made once.
This article is general information for Indian exporters. It is not tax or legal advice. Check current rules with your chartered accountant, CHA and bank.
