Payment Reference in Pooled Accounts
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Payment Reference in Pooled Accounts
When using pooled accounts for sending and receiving payments, a payment reference is crucial. It’s a unique identifier used to determine which individual or entity a particular transaction belongs to. Without a payment reference, it would be nearly impossible to allocate incoming funds to the correct customer or outgoing funds to the correct invoice since all transactions are mixed together in one account.
Why Payment Reference is Needed:
- Allocation: To ensure that payments are allocated to the correct customer or invoice.
- Reconciliation: To match each transaction to the customer’s ledger for accurate financial records.
- Tracking: To allow both the sender and receiver to track the transaction and confirm its purpose.