Payment Method and Payment Form in Electronic Invoicing: Key Differences and How to Use Them Correctly

When issuing a CFDI (Digital Tax Receipt), it’s essential to understand the difference between payment method and payment form. Although they may sound similar, each serves a different purpose in the electronic invoice. Using them correctly helps you avoid errors, stay compliant with SAT regulations, and improve the accuracy of your invoicing system. In this guide, we’ll explain how they work and how to automate the process with a CFDI API.

What is the payment method?

The payment method indicates when the transaction is settled. There are only two valid options according to SAT:

• PUE (Payment in a single installment): Used when the full payment is made at the time of the transaction or before issuing the invoice.

• PPD (Payment in installments or deferred): Used when the payment is made after the transaction, in one or multiple parts.

How to choose the correct payment method

Before issuing the CFDI, you must know whether you’ll receive the full payment immediately or later:

• If your client pays the full amount at the time of sale, select PUE and choose the correct payment form code, excluding 30 (advance application) and 99 (to be defined).

• If payment will be made later, use PPD and set the payment form as 99 - To be defined. Then, you’ll need to issue a Payment Complement (Complemento para Recepción de Pagos) for each payment received.

What is the payment form?

The payment form refers to the means by which the transaction is paid. In other words, how the invoice is paid: wire transfer, cash, card, etc.

You must record the actual payment form used to settle the transaction. If multiple payment forms are used, you should indicate the one that represents the highest amount. If the amounts are equal, you can choose either one.

SAT’s official catalog includes the following codes:

• 01: Cash

• 02: Nominated check

• 03: Electronic funds transfer

• 04: Credit card

• 05: Electronic wallet

• 06: Electronic money

• 08: Food vouchers

• 12: Payment in kind

• 13: Payment by subrogation

• 14: Payment by consignment

• 15: Debt forgiveness

• 17: Compensation

• 23: Novation

• 24: Confusion

• 25: Debt remission

• 26: Prescription or expiration

• 27: To creditor’s satisfaction

• 28: Debit card

• 29: Service card

• 30: Advance application (used only in credit notes)

• 31: Payment intermediary

• 99: To be defined

You can check the official descriptions and updates in SAT’s online catalog.

Key differences between payment method and payment form

Although they’re related, they serve different functions:

• The payment method tells you when the payment is made.

• The payment form tells you how the payment is made.

• The method determines whether a payment complement is required.

• The form reflects the actual means used at the time of the transaction.

Example:

If your customer pays you in two installments, the payment method will be PPD. When you receive the first wire transfer, the corresponding Payment Complement must include the payment form 03 - Electronic funds transfer.

Automate your invoicing with a CFDI API

Correctly using these fields is essential to avoid errors in your electronic invoicing. With FacturAPI, you can fully automate CFDI generation and ensure compliance with SAT requirements.

Our electronic invoicing API handles the correct use of both payment method and payment form on each invoice. It also streamlines the generation of payment complements whenever needed.

Make your system invoice accurately, automatically, and in full compliance with Mexican tax rules. Start using our CFDI stamping API today and say goodbye to common invoicing errors.