Having and Invoice directly Credit a Revenue account - other than Accounts Receivable

Yes, we can create a Journal Entry to move the funds to your Grants revenue account, Heyste. I'll discuss the details and guide you in doing this below.

Invoices in QuickBooks Online (QBO) will always affect and automatically go into Accounts Receivable by default. Thus, choosing a different revenue account is currently unavailable.

As a workaround, we can create a journal entry after receiving the payment to move the funds from the Accounts Receivable to your Grants revenue account. You can work with your accountant in doing so to ensure proper recording.

Moving forward, we can consider using the bank deposit feature when making and recording transactions to your Grants revenue account to bypass the A/R workflow altogether.

Here's how to do it:

1. On your left panel, click the + New icon.
2. Select Bank Deposit.
3.  Provide the necessary information in the Add funds to this deposit section.
4. In your case, under the Account dropdown, choose the "Grant" Revenue Account.

Check out this article for more information: Record and make bank deposits in QuickBooks Online.

Furthermore, refer to this article if you want to organize and group your bank transactions accordingly: Categorize online bank transactions in QuickBooks Online.

Should you require further assistance with invoices-related concerns, please don't hesitate to reply. I'll be willing to lend a hand.

@JustinDaveC  Accounts Receivable isn't a revenue account in the first place. What?

@Heyste  Invoices only have balances showing in Accounts Receivable until they are paid. It is not a case of 'payment will either be assigned to Accounts Receivable or Grants'.

This can go one of two ways. If you are Cash basis, then when the invoice in question is marked as paid (Presumably by matching in this scenario), the revenue is recognized according to the Item you used on the invoice and, relatedly, how the Item itself is set up.

If you are Accrual basis, then the revenue was recognized when you created the invoice and has already flowed through according to how you set up the Item you used on the Invoice. Matching the payment simply moves an amount from Accounts Receivable to the bank in question.

In short, it is a case of Accounts Receivable vs. bank, and recognizing revenue according to your Cash or Accrual basis. These are two separate events.

@FishingForAnswers 
We use accrual. Thank you for revealing the need to define the "Item" for the Invoice (Which QBO calls "Pledges" it seems?). That was the key piece I was not understanding. I remember seeing it in a tutorial video, but didn't realize the full significance. This has resolved my concern