How do I get a unapplied payment that is showing as a credit in a paying customer's account to go away?

Hi jacqueline8,

Welcome to the Community! It's great that you're taking advantage of all the features that QuickBooks Online has to offer to make managing your business simple. I can explain how to handle your unapplied credit. 

How you'll handle this credit will depend on the situation. If this is a duplicate and the related invoice already has a payment applied to it, then you'll need to delete the credit that was created by the unapplied payment. If this payment was posted through a bank deposit, you'll need to remove the payment line from that deposit or delete the whole deposit in order for the system to let you delete the payment. 

If there's an open invoice that this payment relates to, you'll navigate to the invoice and click Receive payment. From there, you can apply the credit that's generated by the unapplied payment to the invoice. This credit will then go away. You can learn more about handling an unapplied payment in this article: Unapplied cash payment income on your profit and loss

If you're still unsure of how to handle this transaction, I recommend checking with your accountant to see how they think it should be taken care of. You can invite your accountant to view your company through the My Accountant tab. If you're not already working with an accountant, you can use the Find a pro to help option to search for a QuickBooks certified Pro Advisor near you. 

Please don't hesitate to reach out if there's anything else I can help with! 

Why do some received payments show as unapplied?

Hi there and thanks for joining in on this thread to learn more about Unapplied Payments. Understanding the Status of the payments you record in QuickBooks Online is important, so I want to make sure you have all the information you need.

If you're seeing Unapplied in the Status column for a Payment that you received, it's because it hasn't been applied to a specific Invoice yet. To remedy this, you'll want to apply it to an Invoice. Here's how:

1. Hover over the Sales tab and choose All Sales.
2. Locate the Payment that's showing Unapplied and click it to open it up.
3. Ensure that you've specified a Customer with an open Invoice.
4. Double-check that the Payment method and Deposit to fields are correct.
5. Under the Outstanding Transactions section, check the box next to the open Invoice(s) that you'd like to have this Payment applied to.
6. Hit Save and close when you're finished.

To avoid seeing this in the future you'll just have to ensure that you've selected an invoice in the Outstanding Transactions section so that you know your Payment is applied. You can also record a payment towards a specific invoice directly by navigating to the All Sales section of the Sales menu and hitting Receive payment in the Action column of the relevant Invoice. A payment that's applied will show a status of Closed in the Status column.

I hope this clears things up. Reach out if any other questions pop up. I'm here to help you navigate QuickBooks with ease.

Does this also apply to cases where journal entries have been used to reduce A/R with the customer's name entered into the "name" column? So, will QBO present the credit to the customer's A/R account as an unapplied payment? If not, then what happens in that case? On the supplier side, will JEs used to reduce a supplier's A/P amount (for the same amount of the specific bill you are using the JE to pay), or is there either another step required to apply the JE's debit (i.e., payment) to that specific bill?     

Hi SSWap5922.

I'd be happy to help clarify what my colleague mentioned regarding receiving payments using a journal entry.

When it comes to journal entries the part you need to make sure to follow is the steps to avoid seeing this in the future. So in order to record a payment towards a specific invoice directly go to the All Sales section of the Sales menu and hitting Receive payment in the Action column of the relevant Invoice. This will allow you to add the journal entry against the invoice and mark it as a payment. When a payment is applied it'll show the status as Closed in the Status column.

If you have any questions let us know and we'd be happy to help.

The real question is why aren't all payments applied to invoices after they have been created for the same customer? As an aside but associated is why are some payments credited to invoices when they shouldn't be as the program sometimes does one, and other times the other, with no known or evident consistency in application. If there were consistency then handling the aberrations would be much simpler. 

But then again, a simple reminder that

A: there is a credit associated with the customer

or B:  there are multiple invoices that a payment could be applied to would go a long way to making the program useful.

Perhaps I expect too much of a program that is supposed to simplify this data processing?

Disappointed again.

Cheers!

Hey there Brnstrmr, 

Thanks for reaching out to us here. Making sure you get the support you need is important. I would be happy to point you in the right direction for the best assistance.

Based on what you've described, I feel it would be beneficial to have someone work with you virtually to ensure the credits are applied correctly and go over your option to create recurring templates. They'll be able to verify your account details in a secure setting, as well as view your screen to better assist you. You can reach them by following one of these methods:

Schedule a Callback or start a Chat: click (?)Help in the upper right > type and enter "Contact support" into the QB Assistant > click Contact Us > explain your situation > click Let's Talk > choose Get a callback or Start a Chat.
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If you have any other questions, feel free to reach out here.