How do I subtract a received payment from an invoice that will show that received payment and update the total amount due remaining?

Let me guide you in processing a partial payment to your invoice, Purehvac.

In QuickBooks Online (QBO), the software automatically adjusts the open balance when you record a partial payment for an invoice. I'll share the steps below to achieve this:

1. Click +New and click Receive payment.
   
   
   
   
2. Complete the Customer, Payment Date, Payment method, and Deposit to dropdown.
   
   
   
   
3. In the Amount received field, enter the amount your customer paid.
4. In the Outstanding Transactions section, tick the checkbox for the invoice you're recording the payment for.
5. Enter the Reference no. and Memo if needed.
6. Hit Save and close.

To check the outstanding balance for the specific customer or the invoice you applied payment to, here's how:

1. Go to Sales and select Customers.
   
   
   
   
2. Locate and click the customer's name.
3. Select the Transaction List tab.
4. From the Type dropdown, click Invoices.
5. Locate the invoice.
6. Under the STATUS column, you'll see Partially paid, including the remaining amount due.

Additionally, I'll share this article to assist you in generating proof of transaction whenever your customer immediately pays for products or services: Create sales receipts in QuickBooks Online.

Finally, you can take advantage of our QuickBooks Live Expert Assisted service for personalized guidance to help streamline your payment records according to your unique business requirements. Our dedicated experts work directly with you to create customized solutions that align with your company's specific needs.

Please don't hesitate to comment below if you have other invoice concerns. We'll be around to respond. 

@purehvac23 

If you want the payment received to show as a line item on the invoice, the instructions provided by @CamelleT won't accomplish that.  To have it show as a line item on the invoice, create a service product called, 'Payment Received' and select your bank account or undeposited funds as the 'Income account', depending on how the payment is deposited into your bank account.  Then, when you receive the payment, add the 'Payment Received' service item to the invoice as a negative amount.  That will show as a separate line item on the invoice, reduce the amount due, and put the cash into either your bank account or undeposited funds.  IMO, QB should have an easier way to handle prepayments/deposits on invoices.  

@purehvac23 

I forgot to mention that this process works fine if you're on accrual basis.  If you're on cash basis, QBO will not report the income until the invoice is paid in full which is incorrect since prepayments/deposits are income for cash basis taxpayers when received.  In other words, the deposits/prepayments on partially-paid invoices will not show as income.  I don't know any way around that.  Depending on how many invoices you have outstanding at any given time, this may or may not be an issue.