Matching Invoices entered in QBO to Payments Made via Square

Thank you for the thorough explanation about how you handled the Square payments in QuickBooks Online, jdicostanzo. 

Based on what you shared, the downloaded Square transaction has already been matched to a corresponding deposit in the Bank transactions tab.

Because of that, it can no longer be matched to the invoice since it has already been accounted for.

If the matched transaction is already posted in the correct bank and assigned to the appropriate income categories, you'll want to delete the invoice instead.

However, I would recommend reaching out to your accountant for situations like this to ensure any transactions are treated correctly from an accounting perspective. 

Here's how to delete the invoice:

1. Go to the Sales menu and proceed to the Invoices tab.
2. Look for the invoice, then click the drop-down list beside Receive payment.
3. Choose Delete.
4. Click Delete once again.

With regard to the inability to match Square transactions to invoices, I would recommend reaching out to our support team. They can take a closer look at this and check why you can only see the Add option.

Here's an article on how to reach out to them: QuickBooks Online Support.

The Community is always here if you need anything else.

Hello and thank you for the reply.

While I appreciate what you've suggested, there has to be a way to enter a QBO invoice, send it to a customer, and then have it associated with a square payment if they choose to pay that way.  Otherwise I will lose visibility of the invoices I've sent to the customers as they've already recorded the invoice # in their system.

What is the suggested workflow for this?

Hello and thank you for the reply.

While I appreciate what you've suggested, there has to be a way to enter a QBO invoice, send it to a customer, and then have it associated with a square payment if they choose to pay that way.  Otherwise, I will lose visibility of the invoices I've sent to the customers as they've already recorded the invoice # in their system.

What is the suggested workflow for this?

Hi, @jdicostanzo. Thanks for returning to this thread. Let me hop into this conversation and help you match your Square transactions with your QuickBooks Online (QBO) invoices.

When adding a Square transaction from the App transactions page, QBO automatically creates a sales receipt and a deposit that are linked to each other. To associate the Square transactions with the corresponding invoices, we'll need to record the invoice payments first. Then, edit the deposit to associate it with the invoice payments. I can help by sharing the details of accomplishing these steps in QBO.

Since you've matched the Square transactions in the Bank transactions page, let's record the invoice payments, posting each to the Undeposited Funds (or Payments to deposit) account. You can follow these steps:

1. Click on the +New button. Then, Receive payment.
2. Choose a Customer from the drop-down list.
3. Enter the Payment Date and choose the appropriate Payment Method.
4. Select Payments to deposit from the Deposit To drop-down list.
5. Place a checkmark for the corresponding invoice/s.
6. Hit Save and close.
7. Repeat these Steps 1 to 6 for the rest of the invoices.

Next, edit the deposit record posted in your bank account. In this process, we'll need to unlink the Sales Receipt associated with the deposit and link it to the recorded invoice payment.

1. Click on the Gear icon in the upper right corner.
2. Select Chart of accounts.
3. Find the bank account where the Square transactions are posted after the matching process. Then, select View register.
4. Find the corresponding deposit transaction at issue. To help in this task, click the Funnel icon and choose Deposit from the Transaction type drop-down list.
5. Select the deposit transaction. Then, hit Edit.
6. Uncheck the sales receipt linked to it and place a checkmark for the invoice payment.
7. Hit Save and close.
   

    

Lastly, proceed with deleting the sales receipt previously linked with the deposit. I've added a screenshot for a visual guide.

If you need to reconcile your accounts after this, let me add this article as a future guide: Reconcile an account in QuickBooks Online.

We'll be here in the Community if you have further questions about applying a Square payment to an invoice in QBO. We'll do our best to assist. Take care.