What is the indirect edit by system?

An Indirect Edit by System in the QuickBooks Online audit log means that QuickBooks automatically changed or created a transaction, rather than a user directly opening and editing the record. In your case, QuickBooks Online is automatically applying the unapplied payments to new bills to clear the balance. To prevent this from happening in the future, I recommend turning off the Automatically apply bill payments feature. Here’s how:

1. Click the Gear icon and select Account and Settings.
2. Go to the Advanced tab and click the Pencil icon next to Automation.
3. Toggle off Automatically apply bill payments.
4. Click Save, then select Done.

After that, you can unapply the payment from the bill. Here’s how:

1. Go to All apps and select Expenses & Bills.
2. Click Suppliers, then select the supplier's name.
3. From the Transaction List, open the bill payment.
4. Uncheck the bill under Outstanding Transactions, then enter the amount again.
5. Select Save and close.

Let us know if you have any other questions. We're here to help.