Meaning
Instruction code in the SWIFT messaging system that designates the sender as the party responsible for all transaction fees associated with a cross-border payment. Field 71a our instruction ensures that the beneficiary receives the exact amount stated on the invoice without deductions for intermediary bank charges.
Cost Allocation
Businesses use this specific coding to maintain precision in international accounts payable. Using the field 71a our instruction prevents the short-payment of invoices that can lead to shipping holds or late fees. The sender pays their own bank fee plus an estimated amount to cover the downstream costs.
This upfront payment removes the uncertainty of final settlement amounts for the receiving party.
Accounting Precision
Reconciling payments becomes simpler when the incoming amount matches the ledger entry exactly. The field 71a our instruction eliminates the need for manual adjustments to account for small variances in received funds. This consistency is particularly useful for automated reconciliation software.
Market Standard
Large-scale procurement agreements often specify that all payments must be made using this instruction. Adherence to the field 71a our instruction demonstrates a commitment to the agreed contract price. The use of this code removes the friction of debating who should bear the cost of the banking infrastructure.
