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Record invoice payments in QuickBooks Online

Learn how to receive and record the accounting for invoice payments.

In QuickBooks Online, there are a few ways to record sales transactions:

  • If your customer paid for the product or service at the time of the sale, give them a sales receipt. Then you're all done.
  • If your customer plans to pay you in the future, send them an invoice.

After a customer pays for their invoice and you process the payment outside of QuickBooks (i.e. with services like Square, PayPal, or other POS systems), there's one more step. You need to record and categorize the payment. This connects the payment transaction to the original invoice so your accounts stay balanced. Here's how to record invoice payments.



Record invoice payments

After you process a payment, you need to record it in QuickBooks so it marks the invoice as paid. Otherwise, invoices stay open and unpaid on your reports. Follow the steps for how you want to record the payment:

Record payment for a single invoice

  1. Select + New.
  2. Select Receive Payment.
  3. From the Customer dropdown, select the name of the customer.
  4. From the Payment method dropdown, select the payment method.
  5. From the Deposit to dropdown, select the account you put the payment into. Tip: You can put the money directly into an account, like your chequing account, or select Undeposited funds if you need to group the payment with others. .
  6. In the Outstanding Transactions section, select the checkbox for the invoice your recording payment for.
  7. Enter the Reference no. and Memo if needed. This is optional.
  8. When you're done, select Save and close.

Record partial payment for an invoice

You should record payments, even if you were only paid part of what's owed. QuickBooks Online keeps track of the remaining invoice balance:

  1. Select + New.
  2. Select Receive Payment.
  3. From the Customer dropdown, select the name of the customer.
  4. From the Payment method dropdown, select the payment method.
  5. From the Deposit to dropdown, select the account you put the payment into. Tip: You can put the money directly into an account, like your chequing account, or select Undeposited funds if you need to group the payment with others. .
  6. In the Outstanding Transactions section, select the checkbox for the invoice your recording payment for.
  7. In Amount received field, enter how much money your customer paid.
  8. Enter the Reference no. and Memo if needed. This is optional.
  9. When you're done, select Save and close.

To see the remaining balance for the customer:

  1. Go to the Reports menu.
  2. Find and open a Customer Balance Details report.
  3. Select Run report.
  4. Review the customer's Open balance.

Note: When you record partial payments, QuickBooks applies it to the first line item of the invoice. It applies the payment to each line until the payment is used up. This is by design. You can't change the order

Group multiple payments together into a single record

For cases when you deposited several payment cheques at the bank and they were recorded as a single record, deposit payments to the Undeposited Funds account. This lets you group those same multiple records together in QuickBooks.

You only need to do this if your bank recorded multiple payments as a single record.

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