Proof of payment: what counts and what to do when a customer says they paid

A remittance advice is what many customers send with a payment. It is useful for matching, but on its own it is the customer's own statement of what it paid or plans to pay, and it may be sent when a payment is scheduled rather than when it clears. A bank confirmation is stronger, because it comes from the customer's bank.

An ACH trace number is a 15-digit number the bank sending an ACH payment assigns to it. It is the most useful single detail for finding a missing ACH payment, because your bank can search for it.

The Federal Reserve Bank of Atlanta notes that a trace number is only required to be unique within its batch. So when you ask your bank to look, give the trace number together with the amount, the date and the sender's name.

Say a design studio invoices $4,800, and the customer's AP team replies that it was paid last Tuesday. Nothing matching shows in the studio's bank account.

1. Check your own records first. Look for a deposit of the exact amount, a combined payment covering several invoices, or a short payment after fees. Check it was not applied to the wrong customer.
2. Ask for proof and the reference. Ask for the payment date, amount, method and the trace or reference number, plus the bank details it was sent to.
3. Compare the bank details. If the account number on their proof is not yours, stop and read the fraud section below.
4. Ask your bank to trace it. With a trace number or reference, your bank can look for the incoming payment.
5. Pause chasing while you look. A reminder for money the customer believes it sent damages trust.

Here is an email asking for proof:

Subject: Payment for invoice [Invoice number]

Hi [Customer name],

Thanks for letting us know invoice [Invoice number] for [Amount] was paid on [Date they gave].

We have not been able to find it in our account yet. Could you send the proof of payment from your bank, including:

- The payment date and amount
- The payment method (ACH, wire or check)
- The trace or reference number
- The bank account details it was sent to

With the trace number our bank can look for it straight away.

Thanks,
[Your name]
[Your company]

Match on three things: amount, date and sender.

• Amount. Look for the exact figure, then for a larger deposit that combines several invoices, then a smaller one after bank fees or a deduction. A partial payment needs its own follow-up for the balance.
• Date. Allow for the time the method takes to settle. A check can take days to arrive and clear.
• Sender. The name on the deposit may be a parent company or a payment platform, not the name on your invoice.

Once found, apply it to the right invoices, so your accounts receivable aging report is accurate.

If the customer's proof shows money sent to an account number that is not yours, it may be business email compromise. In this scam, a fraudster sends an email that appears to come from a supplier, announcing "new bank details", and the customer pays into the fraudster's account.

What to do:

• Do not accept new bank details by email alone. The FBI's Internet Crime Complaint Center advises using secondary channels or two-factor authentication to verify requests to change account information. In practice that means contacting a person you already know, using details you already hold, not the ones in the email.
• Tell the customer quickly. The IC3 advises that a business which finds a fraudulent transfer immediately contact its financial institution and request a recall of the funds.
• Report it. The IC3 asks victims to file a complaint at ic3.gov regardless of the amount lost.

Who bears the loss depends on the facts and the contract. That is a question for your lawyer, not your collections emails.