The reference or remittance information field on a transfer looks like a formality, and it is the only thing travelling with your money that explains what it is for. A supplier receiving several payments a day cannot allocate an unlabelled one to your order. The money arrives, sits unapplied, and your order waits behind a reconciliation problem you created in one field.
- The reference is how the supplier matches the money to your order.
- An unreferenced payment is not lost, but it is not applied either.
- Use the proforma invoice number, not your own internal code.
- A clear purpose also reduces compliance questions in transit.
- Keep it short: some systems truncate long references.
What the supplier sees at the other end
The supplier finance team does not see your email thread. They see a bank statement: an amount, a date, a sending party and whatever text travelled with it. From that they have to identify which of several open orders has been paid.
- The sending name may be your company, a director, or an intermediary.
- The amount may not match the invoice exactly if charges were deducted.
- The date tells them nothing about which order it belongs to.
- The reference is the only field you control that answers the question.
Where the sending name differs from the buying company — which happens often and innocently — the reference stops being helpful and becomes the only link at all.
What to write in it
The useful content is whatever the supplier already uses to identify the order, not whatever you use. There is also a hard ceiling on how much of it travels. On a standard SWIFT MT103 — the message behind most international transfers — the remittance information field is specified as four lines of 35 characters, so 140 characters in total, and the ISO 20022 format replacing it keeps the same 140-character allowance for unstructured remittance text. Write more than that and the surplus may simply not arrive.
| Write this | Not this |
|---|---|
| The proforma invoice number | Your internal purchase-order code |
| A short goods description if space allows | Payment or Invoice on its own |
| Deposit or Balance where relevant | Nothing at all |
| The supplier order number they quoted you | A long sentence that will be truncated |
It also helps the payment travel
The same field is read by the institutions handling the payment. A clear, specific purpose reduces the chance of a query in transit, because a payment that explains itself needs less explaining.
- 1State the purpose specifically rather than generically.
- 2Keep the wording consistent with the invoice you can produce if asked.
- 3Avoid abbreviations that mean something only inside your business.
- 4Do not include personal data that has no business being on a payment record.
The last point matters more than it seems. A reference is stored, forwarded and read by parties you never deal with, so it should carry the minimum needed to identify a commercial transaction and nothing else.
After the payment goes
Sending the remittance advice to the supplier the same day closes the loop that the reference opened. It costs a minute and removes the most common cause of a supplier believing they have not been paid.
- Send the confirmation to the finance contact as well as the sales contact.
- Name the invoice in the message, not only in the attachment.
- Keep the confirmation with the order file for reconciliation later.
- If the reference was wrong, say so immediately rather than waiting to be asked.
An unmatched payment is resolved by a human comparing documents. Giving them the document before they go looking is the whole of the technique.
Frequently asked questions
What if the field is too short for the invoice number?
Use the shortest form that is still unique to the order, and send the remittance advice separately so the full detail reaches the supplier another way. With 140 characters to work with, an invoice number and one word of context normally fit comfortably; a sentence does not.
Does the reference affect how fast the payment arrives?
It does not speed up the transfer itself, but a vague purpose is one of the ordinary triggers for a question in transit, and a question does add days.
The payment has already gone with no reference. What now?
Send the remittance advice to the supplier finance contact immediately with the invoice number. They can normally match it manually once someone tells them what to look for.
SilkBridge helps importers in Kenya, Uganda and Tanzania pay Chinese suppliers in RMB — documented, reviewed in Nairobi, and tracked to payout.
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