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Record invoice payments

by Intuit•46• Updated 2 days ago
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Learn how to record invoice payments in QuickBooks Online.

Record invoice payments from your customers. This helps you keep track of any remaining balances of your customers.

Once your customer pays your invoice you need to record it in QuickBooks. Let’s go over two ways you can receive payment and how to properly use the undeposited funds account to keep your books accurate. The first way you can receive your payment is to select Sales. Then select Customers. This shows your Customers List. Just find your customer and you will see the money they owe you here. To receive a payment, you could select Receive Payment right here. However, another way to receive payment is to select the Create menu and Receive Payment. Then, enter the customer’s name. QuickBooks displays any open invoices for that customer. Select the checkbox for the invoices the customer is paying. QuickBooks assumes that the customer is paying the entirety of the invoice, but if this is a partial payment, you can change the payment amount. Next, record how the customer paid you. If you don’t see their payment method listed, just select Add New and add it. This customer is paying with a check. You don’t always need to record a reference number, but since this customer is paying with a check let’s record their check number. Then choose the account where the money is right now. It's tempting to choose checking, but unless the money is in your checking account already you should choose Undeposited Funds Undeposited Funds is a temporary account that holds payments you plan to deposit later at the bank. They aren’t in the bank yet, but they will be later. Undeposited Funds is important because it allows you to easily combine several payments together into a single deposit at the bank. If you don’t combine deposits then you can skip this and just record the payment once it is in the bank if you prefer, but otherwise it is best to use Undeposited Funds. Let’s select Undeposited Funds so we can combine it with other deposits later. Then select Save and Close. Now this customer has a zero dollar balance since they paid their invoice. If you recorded the money going directly into a bank account, you’re done! But if you used Undeposited Funds, you’ll need to record the deposit after you put it in the bank. To see this process watch our video on How to Record a Bank Deposit. Now try recording an invoice payment of your own.

With QuickBooks Payments, you can see when customers view and pay invoices, and get an up-to-date picture of your cash flow to make smarter financial decisions.

Record invoice payments in QuickBooks Online

Note: These steps apply to the new version of Receive payment.

  1. Go to + New and select Receive payment.
  2. From the Customer ▼ dropdown, select a customer or select + Add new to create a new customer.
  3. From the Payment method ▼ dropdown, select the payment method or select + Add new to add a new payment method.
  4. From the Deposit To ▼ dropdown, select the account to put the payment into.
    Note: The Deposit To ▼ dropdown doesn't appear if you use a merchant account to process payments.
  5. In the Amount received field, enter the payment amount. Payments can be full or partial.
  6. In the Outstanding Transactions section, tick the box for the invoices you're recording the payment for.
    • If you select only one invoice, the amount received appears in the Payment column and in the Amount to Apply.
    • If you select several invoices, their open balance also appears in the Payment column. This may exceed the amount you have in the Amount received field. You can adjust the amounts in the Payment column to show the amount received.
    • The Amount received field shows the total amount from the Payment column. Any difference between the amount to apply and the amount received, shows as the amount to credit. Learn how to apply credits to customers.
  7. Select Save and close.

If your customer pays you more or less than expected, you can make changes to a payment receipt easily. 

  1. Follow this link to complete the steps in product Open this link in a new window
  2. Locate and open the payment transaction.
  3. Edit the Amount received field.
  4. Select Save and close.

Note: If you are editing or deleting a transaction linked to others, QuickBooks will automatically alert you.

If you want to delete a payment altogether, locate and open the payment transaction and select More at the bottom of the page, then Delete. Once you have deleted a transaction, it is not possible to reverse this.

  1. Follow this link to complete the steps in product Open this link in a new window
  2. Open the payment you want to delete. If you are not sure which payment is tied to the invoice that you are deleting the payment for, you can also open the payment by going to the invoice and selecting payment on the top right corner of the invoice.
  3. Select More.
  4. Select Void or Delete.

To see the remaining balance for the customer:

Follow this link to complete the steps in product. Open this link in a new window

  1. Find and open the Customer Balance Summary report.
  2. Select Run report.
  3. Review the customer's open balance in the Total column.

Note: When you record partial payments, QuickBooks applies the payment to the invoice line items in order. Additional payments apply to the next line items until the payment is complete.

Record several invoice payments in a single deposit

You can use the Undeposited Funds account to record several payments in QuickBooks. This allows you to combine those payments into one deposit transaction.

Note: Do this only if your bank combines several payments into one deposit.

Have any other questions for our team?

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