Glossary · Payment methods
Payment reference
A payment reference is the text a customer adds to a bank transfer to say what it pays. The invoice number is the best one to ask for.
The payment reference travels with the transfer and appears on your bank statement. It is the single most useful field for cash application: a reference that contains the invoice number lets a payment match itself.
Ask for it explicitly. Print “Please use INV-0142 as the payment reference” next to your bank details, and repeat it in reminders. Without that, customers write their own company name, a PO number or nothing at all.
Reference length varies by payment system: SEPA allows up to 140 characters, UK Faster Payments 18. Keep invoice numbers short enough to fit.
Example
Two clients pay €4,000 on the same day. One references “INV-0142” and is matched automatically; the other references “April”, and finance spends twenty minutes working out what it pays.