In the transportation and logistics industry, invoicing is a critical — and sometimes confusing — element of operational success. Often, even experienced transportation professionals are unsure of the difference between bills of lading (often abbreviated as "BOLs") and freight invoices, though both types of documents are essential.

In this article, we'll clarify the differences between freight invoices and bills of lading and give you step-by-step instructions for writing an accurate freight invoice. We'll also provide some practical tips to help you bill your freight customers successfully.

Want to customize your invoice?
Delete row Item Description Unit Price Quantity Amount
Delete Line
Delete Line
Balance Due 0.00

Bill of Lading vs. Freight Invoice: What's the Difference?

Bill of Lading (BOL)

Bills of lading are legal documents specifying the precise nature of the shipping service agreed to by the shipper (the company sending the goods) and carrier (the company transporting them). They must be reviewed and signed by a representative of the shipper and carrier, and later by the consignee (receiving party) once the goods are delivered.

These forms provide descriptive information related to the goods being shipped (such as their weight, value, and packaging type) and the shipping logistics of the contract (where and when the goods will be collected and delivered). They also include many other key shipment details, such as the National Motor Freight Classification code for the type of freight being moved.

Bills of lading are legally binding and must accompany the shipment at all stages of the transportation process. They can be used in court to settle disputes and are often reviewed by Customs and law enforcement officials to determine the contents of a shipment. Additionally, if a shipper conducts a freight audit to assess its overall freight costs or freight spend on specific products, information contained in bills of lading may prove helpful.

Freight Invoice

In contrast to the legal nature of bills of lading, freight invoices are primarily financial documents used for billing and accounting purposes. Freight invoicing is the process by which carriers charge their customers for the transportation services provided. Freight invoices (sometimes called "carrier invoices" ) include common industry surcharges, such as accessorial charges or fees for special services upon delivery.

Typically, transportation companies send their bills to the shipper by freight invoice. (In most instances, the shipper has already charged their customers for shipping and handling costs as part of their order.) To satisfy their customers and collect payment promptly, carriers must ensure that each freight invoice is clear, complete, and accurate.

Below, we'll provide step-by-step instructions for creating a freight invoice using Skynova's customizable invoice template tool. Once you're done creating your freight invoice, you'll be able to download, print, or email it as a PDF file for free.

Creating a Freight Invoice in 4 Simple Steps

1. Add Name and Address Information for Your Company and the Shipper

Invoice Help

Provide name and address information for your company and the shipper in these areas of the invoice template. It may also be wise to identify a specific invoice recipient at the shipper company to ensure that the bill is directed to the right person. Below your own address, you can list contact information for your company, such as your phone number, fax number, and email address.

Just be sure you're sending your invoice to the shipper, not the consignee for the ship: If you're rushing, that mistake could be easy to make.

2. Add the Right Invoice Number and Associated Dates

Invoice Help

In this section of the template, add a unique invoice number, the invoice date on which it was created, and a due date for payment. Ensure that the due date reflects the payment terms agreed upon with your customer.

It's vital that the invoice number you provide here matches the invoice number you include on the shipment's bill of lading, linking these two documents. With Skynova's invoicing application, you can automate this important process of creating and tracking distinct invoice numbers.

3. Enter Your Shipping, Accessorial, and Other Charges

Freight rates can be calculated in several ways, including weight-based and per-pallet pricing systems. Typically, you'll charge customers more for transporting their goods greater distances. Carriers also charge fees for additional services (termed accessorial charges) and a fuel surcharge to account for variations in gas prices.

Thankfully, our template is flexible enough to accommodate all these pricing methods on a single invoice — and sum them up for a bottom-line total. Here's an example of two pallets of goods transported with accessorials and fuel surcharges added.

Invoice Help

4. Provide Additional Context and Contact Information

To avoid confusion on the part of your clients, use the "Notes" section of the invoice template to provide any context that may help them assess the invoice. Information about the dates of the collection and delivery and any accessorial charge will be helpful in this regard.

Invoice Help

Freight Invoicing Tips and Best Practices

Aside from creating an accurate freight invoice document, there are several related measures you can take to ensure your freight billing goes smoothly. The following tips will help you collect payment while keeping customers happy and avoiding logistical snafus.

Understand and Use Industry Terms Correctly

You'll often be working with experienced logistics managers steeped in the jargon of the transportation field. When they review your freight bills, here are a few terms they'll expect to be used in a manner consistent with industry standards.

  • Accessorial charges: This term refers to fees added to a freight bill for any services beyond standard collection and delivery procedures. For example, you may charge more for the additional work necessary to collect or deliver goods inside a facility, or if your driver is required to assist with the unloading process.
  • LTL (Less-than load or less-than-truckload): This abbreviation refers to freight transportation of relatively small orders that do not require a full truckload. Unlike shipping individual parcels, however, LTL freight is typically packaged in a manner to facilitate bulk shipping, such as shrink-wrapped boxes mounted on a pallet.
  • Special services: This umbrella term refers to kinds of freight shipping that pose additional transportation challenges. In contrast to accessorial charges, which are individual fees, special services can increase the overall freight rates you charge. Common forms of special freight services include transportation of hazardous materials or items that require specific transportation permits.

Make Sure Invoices and Bills of Lading Match

This suggestion may seem obvious but discrepancies between these documents often cause major issues for carriers and their customers. From invoice numbers to descriptions of items themselves, your bill of lading and invoice should be identical in every area of overlap.

If a shipper conducts a freight invoice audit, even small differences between these forms can raise concerns. To keep your customers happy, you don't want to be the carrier that adds complexity to the freight auditing process.

Provide a Clear and Convenient Payment Process

Logistics managers will also appreciate straightforward payment instructions. When you send a freight invoice, be sure to clearly indicate your payment terms and timeline. You should also include info about payment methods, such as how to pay online or address a check. It's also smart to provide a phone number and other contact information for customers with questions about pricing or the payment process.

Invest in Time-Saving Technology

In recent years, new technologies have expedited time-consuming processes across the global supply chain. The transportation industry has embraced digitization and automation, and adopting these tools will yield time and cost savings.

Many shippers and carriers now use transportation management systems (TMS) to track shipment details digitally and electronic data interchange (EDI) systems to transmit documentation. At Skynova, we also provide tools to help accelerate and automate aspects of the freight business, including bidding, estimating, invoicing, and accounting.

Choose Skynova for a Smoother Freight Invoicing Process

Because accurate and consistent invoicing is critical to freight operations, you'll need high-quality software solutions to ensure the success of your transportation business. Skynova's invoicing platform is the ideal tool for your billing needs, streamlining a range of crucial processes.

With Skynova's invoicing application, you can instantly create, send, and track invoices for all of your customers, eliminating the headaches of freight invoice management. It also includes tons of other useful functionality, such as processing online payments and notifying you when a customer opens your invoice emails. To transform the way your business handles billing and freight invoice processing, explore Skynova's full range of business software solutions.

Notice to the Reader

Freight businesses differ significantly in their operational and billing needs. Accordingly, the information provided here may not directly apply to your own freight invoicing practices. For specific guidance tailored to your business and circumstances, we encourage you to consult a qualified accounting professional with knowledge of the transportation industry.

Additional Industry Invoice Templates