A cross-border payment passes through more than one bank, and each one may take a fee. A single field on the instruction — carrying the code OUR, SHA or BEN — decides who absorbs those fees. Choose the wrong one and your supplier receives less than the invoice, treats the order as part-paid, and holds the goods while you work out where the difference went.
- OUR means you pay every charge and the supplier receives the full amount.
- SHA splits them: you pay your bank, the supplier absorbs the rest.
- BEN means all charges come out of the money you sent.
- SHA is usually the default, and it is the one that causes short payments.
- The shortfall is rarely large, but it is often the reason an order stalls.
What the three codes actually instruct
The codes are instructions to the banks in the chain about which side of the transaction carries their fees. They do not change the amount you owe. They change the amount that arrives.
| Code | You pay | Supplier receives |
|---|---|---|
| OUR | Your bank fee and every intermediary fee | The full invoice amount |
| SHA | Your own bank fee only | Invoice amount less intermediary and receiving fees |
| BEN | Nothing separately | Invoice amount less every fee in the chain |
There are typically 2 or 3 institutions in the chain: your bank, sometimes a correspondent bank, and the bank the supplier holds the account with. Under SHA and BEN, each of the later ones may deduct before passing the money on, which is why the final shortfall is not something your own bank can quote you in advance.
Why a small shortfall stops a large order
A supplier reconciling a deposit does not look at whether the amount is approximately right. They look at whether it matches the proforma invoice. Anything less is an underpayment, and most factories will not release production against an underpaid deposit.
- The supplier records the order as part-paid and waits.
- Production does not start, so the lead time you were quoted no longer applies.
- Resolving it means a second transfer, which carries its own fee.
- The second transfer may itself arrive short if the same code is used again.
How to get it right first time
- 1Ask your supplier whether they expect to receive the exact invoice figure. Almost all do.
- 2If they do, instruct the payment as OUR so the charges sit on your side.
- 3Ask your own bank what OUR costs before you send, so it is a budgeted line rather than a surprise.
- 4Tell the supplier which code you used, so they know what to expect.
- 5If a payment does arrive short, send the remittance advice rather than arguing the amount.
Where a payment route quotes you a single all-in figure, that figure normally already behaves like OUR: the amount named is the amount the supplier receives. It is still worth confirming rather than assuming, because the assumption is only tested once the money has moved.
What to check on your own paperwork
The charge code appears on the transfer instruction and again on the remittance advice your bank issues afterwards. Both are worth keeping with the order file.
- The instruction shows what you asked for.
- The remittance advice shows what was actually applied.
- Together they explain any difference between what you sent and what arrived.
If you import regularly, set the code once as a standing preference with your bank rather than choosing it per payment. Most short payments come from a field nobody looked at rather than from a decision anybody made.
Frequently asked questions
Which code should I use by default?
OUR, in almost every case where you are paying a supplier against an invoice. It is the only one that guarantees the beneficiary receives the figure on the invoice.
Why is SHA so common if it causes problems?
It is the default on many systems because it is an even split in general commerce. It suits situations where both sides expect to carry their own costs, which is not how supplier invoices work.
My supplier received less than I sent. What now?
Ask your bank for the remittance advice, which shows the charges applied and by whom. Send it to the supplier with the balancing payment so their records reconcile.
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