There are generally four distinct “entities” or “parties” involved in a commercial transaction as follows: (1) Bill-To is the entity that will be paying this invoice, generally the buyer. (2) Bill-From is the entity that is billing the invoice, generally the seller. (3) Ship-From is the entity that is transporting the goods or providing the services (generally the carrier). (4) Ship-To is the entity that receives the product or service on behalf of the buyer (generally the end-user, as in drop-shipments. To illustrate the above, here are a few examples:
Example 1 – The simplest transaction: You walk into your local bookstore and purchase a book. (1) The Bill-To is You. (2) The Bill-From Is the bookstore. (3) There is no “commercial transportation” involved, however, you can think of the transportation as being you taking the book in your car from the bookstore to your house, which means that the Ship-From is You. (4) The Ship-To is you. So note that in this example, the Bill-To, the Ship-From, and The Ship-To are all the same entity = You.
Example 2 – A more complex commercial-goods transaction: You purchase a book through the internet from Amazon.com, to give as a gift to a friend, and choose for it to be shipped via FedEx. (1) The Bill-To is You. (2) The Bill-From is Amazon.com. (3) The Ship-From is FedEx. (4) The Ship-to is your friend.
Each one of the above four parties in a commercial transaction is identified in an invoice through two data entities: (1) A code that identifies the entity, and (2) A free form entity name.
