I sent a payment link, customer paid. "System-recorded deposit for QuickBooks Payments" , Deposit is to undeposited funds. bank has the deposit. How to pay an invoice?

You'll need to link the deposit on the invoices and match it to the transaction from the bank, ken133. Let me outline the details below.

All online payment transactions are credited to Undeposited Funds, which acts as a default account that retains funds until they are transferred to your bank account. To apply the deposit entry as an invoice payment, follow the steps below:

1. Select + New, then Receive payment.
2. Choose a name from the Customer ▼ dropdown to see all unpaid and outstanding credits.
3. In the Payment date field, enter the day you received the payment.
4. In the Outstanding Transactions section, choose the invoice to mark as paid.
5. In the Credits section, pick the deposit.
6. Click Save and close.

After that, let's go over these measures to create a Bank deposit and select the Bank account where the actual payment was deposited:

1. Go to the New (+) button.
2. Select Bank Deposit, then choose the Bank Account where the payment was deposited. 
3. Enter the date when the actual deposit was made.
4. In the Select the payments included in this deposit section, mark invoice payment that's paid.
5. Review the payment details, and ensure they match the downloaded bank transactions.
6. Click the Save and Close button.

Once done, navigate to the Transactions menu and select Bank transactions to match the deposit with the downloaded entry in the For review tab to prevent double income. I'm adding a screenshot below for reference:

Moreover, refer to this guide to familiarize categories and other actions: Categorize online bank transactions in QuickBooks Online.

Furthermore, reconciling an account in QuickBooks Online is always a good procedure to ensure your accounts are balanced and accurate.

Lastly, do you need help tracking your sales and ensuring they're on the correct account? You can do it with the guidance of an accountant. Speak now with a QuickBooks Live Expert for more personalized assistance.

You can count on me if you have follow-up questions about invoice payments or the reconciliation process. I'll be here to provide the resources and information. Have a great day!

I followed the procedures but unfortunately I now have two entries, see below:  The invoice does now show that it was paid.

I followed the procedures but unfortunately I now have two entries, see below:  The invoice does now show that it was paid.

I appreciate you following the procedures, and I understand how concerning it is to have two payment entries. Let me share some details about what caused the duplicate transactions, @ken133.

Duplicate payments can occur in Undeposited Funds in QuickBooks Online (QBO) when a payment is recorded and manually added to the bank account without linking it to the original entry. This often happens if the Receive Payment entry is deposited and a separate deposit for the same amount is created.

Since there’s already a system-generated deposit, you don’t need to receive and create another deposit, which is why you're seeing the duplicate entry.

I recommend deleting the duplicate transaction from Undeposited Funds or your bank account to ensure your records are accurate. Then, we can adjust the system-generated deposit to change the account from Undeposited Funds to Accounts Receivable (A/R) for proper application to the invoice.

To record the payment, follow the steps below:

1. Go to Sales, then click the Customers tab.
2. Select the open invoice and hit Edit invoice.
3. Click the Receive payment.
4. Once done, click Record and close.
   

Click this link for further information: Record and make bank deposits in QuickBooks Online.

Feel free to check out these additional resources when using the banking feature:

• Exclude a bank transaction you downloaded into QuickBooks Online
• What to do if you can’t find downloaded transactions in QuickBooks Online

Feel free to leave a comment below if you have further concern about handling your invoice payments in QBO. I'll be happy to help. Keep safe!