Use this guide to set up and apply payment reference when you pay vendor journals with Xe in D365 Finance and Operations. This feature makes payment references more useful. Without it, long company names can push out invoice information.

Important: Do not use special characters in the payment reference. Use only letters, numbers, and spaces in your custom reference text. If you use special characters, the payment status may show as "Payment with issues".

What this feature does

When you enable this feature, you can choose how the payment reference is built. You can add custom reference text and preview the result before you save. Payment references have a 35-character limit. If your preview goes over this limit, the system shortens it.

Before you start

You need access to Xe settings in D365 Finance and Operations. The setup only applies after you click Save. If a batch already has a payment reference, the system keeps it when it creates a contract.

How to set it up

1. Open Xe settings.
2. Find the Custom payment reference toggle.
3. Set the toggle to Enabled if you want to control how the reference is built.
4. Select a payment reference format.
5. Enter a value in Custom reference if your format uses custom text.
6. Review the Preview field.
7. Click Save.

If you set the toggle to Disabled, the system hides the controls. It then uses the standard payment reference logic.

Available payment reference formats

How the reference is generated

If Custom payment reference is disabled, the system builds the reference like this:

• No invoice attached: account name only
• One invoice attached: account name – invoice number
• Multiple invoices attached: account name – Multiple Invoices

If Custom payment reference is enabled, the system uses your saved format and custom reference settings.

If you create a contract without a linked invoice:

• If custom payment reference is off, the reference uses the account name only.
• If custom payment reference is on, the reference uses your custom text only.
• If custom payment reference is on and the custom field is blank, the reference is blank.

Note: The preview shows the expected format before you save. The final value still follows the 35-character limit.

Rules to follow

• The maximum length is 35 characters.
• Changes only apply after you click Save.
• Do not use special characters in custom reference text.
• Use only letters, numbers, and spaces.
• If you use special characters, the payment status may show as "Payment with issues".
• If a batch already has a payment reference, the system keeps it during contract creation.

Avoid symbols such as ! @ # $ % ^ & * ( ) - _ + = / \ | : ; " ' , . ? < > [ ] { }

How to use it during payment processing

1. Create or open a vendor payment journal in D365 Finance and Operations.
2. Attach the required invoice, if you need one.
3. Use Pay with Xe.
4. Review the payment reference, which is based on your saved settings.
5. Update the payment reference by hand before you confirm the contract, if your process allows it.

Example scenarios