My clients pay a deposit w/ square when they book online. I plan to use QB invoices for the balance. But I can not figure out how to apply the deposit to the QB invoice.

You need a 3rd party connector to reconcile Square transactions into your QBO.

https://synder.grsm.io/quickbooks

Hi there, @hello-stephanies. I'd be glad to take care of your concern and help you get through this so you can apply the deposit made by your customers using square and link it with your invoice in QuickBooks Online (QBO).

If you already have an existing invoice for this, you can consider manually creating a deposit for the remaining balance and then applying it to the invoice. To begin, here's how:

1. Access your QuickBooks Online company.
2. On the left navigation bar, click the +New button.
3. In the Other column, select Bank deposit.
4. Fill in the necessary details on each field, and then once done click Save and close.

You'll then want to go to Receive payment and select the customer which you receive the payment from. Here's how:

1. Access your QuickBooks Online company.
2. On the left navigation bar, click the +New button.
3. Under the Customers column, select Receive payment.
4. Choose a customer, and then on the Outstanding Transaction section, tick the box for the invoice you'd like to apply the deposit with.
5. Once done click Save and close.

In addition, I've got you this article to help you manage your transactions in QuickBooks Online: Categorize and match online bank transactions in QuickBooks Online.

Feel free to leave a message below if you have any additional QuickBooks-related concerns. Rest assured, our team of dedicated experts is always ready to assist you anytime. Thanks for choosing QuickBooks. Take care, have a good one!

When I start to do the bank deposit it says " Has this payment been recorded? Looks like name name  has 1 open invoice. If the deposit is for that invoice, record the payment in Receive Payment first. That way, your books are accurate."

When I start to do the bank deposit it says " Has this payment been recorded? Looks like name name  has 1 open invoice. If the deposit is for that invoice, record the payment in Receive Payment first. That way, your books are accurate."

The square transitions come up under app transactions. I don't want to record the income twice. 

Hello, hello-stephanies. 

I'll give details about the process and the solution that you can use. When you sync your Square app with QuickBooks Online, transactions are automatically downloaded as invoices or payments. 

If you want to record an invoice in QuickBooks Online, then you'll want to do the following:

• Create a receive payment on your customer paid the invoice.
• Match the deposit to the Square transaction downloaded in the Banking page.

To create a receive payment for the invoice entered in QuickBooks, make sure to deposit the amount to the Undeposited Funds account.

Here's how:

1. Go to + New > Receive Payment.
2. From the Customer drop-down, choose the customer's name.
3. Select the Payment date, Payment method, and choose Undeposited Funds account from the Deposit to drop-down list.
4. Under the Outstanding Transactions section, put a check mark on the invoice you want to pay.
5. Click Save and close.

Once done, let's record a bank deposit by following these steps:

1. Go to + New > Bank Deposit.
2. Select the bank account where you want to deposit the money.
3. In the Select the payments included in this deposit section, put a check mark on the payment you want to deposit.
4. Under Add funds to this deposit, select the customer's name from the Received From column.
5. Select an expense account from the Account column, and enter the fee as a negative amount.
6. Click Save and close.

Finally, match the deposit to the payment posted in the Banking page. 

Here are the steps:

1. On the left panel, click Banking.
2. Go to the For review tab.
3. Find the square payment, and click the Match link. 

I'm adding these articles for reference:

• Record invoice payments in QuickBooks Online
• Record and make Bank Deposits in QuickBooks Online
• Categorize and match online bank transactions in QuickBooks Online

When you're ready to reconcile the account, you can find the instructions here: Reconcile an account in QuickBooks Online. 

I'll be here if you need further assistance. Feel free to tag my name in the comment section. Take care.

@AileneA Thank you. Undeposited Funds is not an option under deposit to. Should I add it as a new payment account? What account type should I select?

@AileneA  There is an option that says "payments to deposit"

Good afternoon, @hello-stephanies. 

Thanks for reaching back out and letting us know the trouble you're having along the way. 

The Undeposited Funds option will appear in the "Deposit to" field of the Receive Payment form. Here's a visual so you won't get confused: 

Let me know if you still don't have this option. I want to be sure that you get back to running your business. I'll be waiting for your response!

@Candice C That option isn't coming up on mine... 

Thanks for your reply, @hello-stephanies.

I appreciate you adding a screenshot of your concern to help me get on the same page. Allow me to join this thread and clarify things out. 

Undeposited Funds is a default account in QuickBooks Online. That said, it should appear in the Deposit to field of the Receive payment form. Hence, search for Undeposited Funds in the field instead of Payments to deposit. 

Please see this sample screenshot for reference:

Otherwise, you’ll want to check in your Chart of Accounts and ensure the account is under the Other Current Assets type. 

Moreover, I’ll be adding this article that you can read through for more details about how the Undeposited Funds account works: What’s the Undeposited Funds account?

Additionally, here are a few more resources that tackle more about the processing of customer payments:

• Record invoice payments in QuickBooks Online
• Deposit payments into the Undeposited Funds account in QuickBooks Online

Please let me know if you need clarification about managing your payments and accounts in QuickBooks Online. I'll be standing by for your response. Have a great day, and stay safe.