I would like to have customers pay their invoices by payment plan. e.g if a customer has an invoice for $1,000 I can create for him to auto charge his credit card $100/m

QB does not do payment plans, an invoice is a final sale in QB.

your customer can make partial payments on an invoice, and you can add a note in the customer message to that effect if you want.

Other wise invoice each month for the amount due

If you charge a customer $1,000 and allow them to pay over time, that really is no longer AR (a type of asset). You just turned that into a different asset. Here is how to do what you asked:

Option 1. Make an Estimate. Then, each month, you invoice for the monthly amount. Each invoice has the due date and amount owed. This is the Sale dated event.

Option 2. Make the invoice for the total. Make a Service item named "Charged to InHouse Credit" and it gets linked to Other Current Asset and name this account "Customer Charge Account" and put this on a credit memo/refund. Apply this to the open invoice. Now the invoice is 0 balance owed and the customer has a debt balance with you.

Every month, use the Charged to InHouse Credit item on the monthly invoice, to show they need to pay their debt to you. Make a Custom Report on the "InHouse Credit" account and set it to total by customer name. This is how you will manage it: when you see a name and the balance is at 0, you will reconcile this account using only an ending balance of 0, and clearing only the activities for any name that you saw is now at 0. Make and save two customized reports from this: one is titled All activity and one is titled Current Balances and this one is filtered for Cleared status = no.

You need to ask your CPA if Option 2 meets your tax reporting, sales reporting and accounting requirements.

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@Anonymous wrote:
how do i set this up? I need basically to have recurring payments that pay down an invoice automatically

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One way, (assuming to want to use QBO Payments) is to create 2 simultaneous recurring transactions with the same schedule:

1.  a recurring Sales Receipt that automatically processes the payment, and use any Item

2.  a recurring JE: debit the income account used in the Item used in the SR (so net effect is zero), credit Accounts Receivable/Customer (make sure setting to automatically apply credits is switched on)

I would be nice if you could link the income account of an Item to Accounts Receivable, but it won't let you 

edit: If you run sales reports, then for step 1, use an Item linked to a balance sheet account, and use that same account in step 2

@Malcolm Ziman

What you just did is make Twice the amount of activity, the JE doesn't offset the Sales receipt in the sales reporting, and the JE to AR never applies itself to open charges, requiring yet another manual processing. If someone is paid by the hour and has nothing else more important to do than handle one value three times, sure, that works fine. It's wrong for nearly all the accounting, reporting and tracking, but sure, you can do one thing using three steps, every month.

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@qbteachmt wrote:

 the JE to AR never applies itself to open charges

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yes it does, if you follow my answer

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@qbteachmt wrote:

the JE doesn't offset the Sales receipt in the sales reporting,

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see my edit

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@qbteachmt wrote:

you can do one thing using three steps, every month.

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no need. it's all automatic

@kbtfin wrote:
how do i set this up? I need basically to have recurring payments that pay down an invoice automatically

One way, (assuming to want to use QBO Payments) is to create 2 simultaneous recurring transactions with the same schedule:

1.  a recurring Sales Receipt that automatically processes the payment, and use any Item

2.  a recurring JE: debit the income account used in the Item used in the SR (so net effect is zero), credit Accounts Receivable/Customer (make sure setting to automatically apply credits is switched on)

I would be nice if you could link the income account of an Item to Accounts Receivable, but it won't let you 

edit: If you run sales reports, then for step 1, use an Item linked to a balance sheet account, and use that same account in step 2

Hello there, @kbtfin.

With QuickBooks Online, you can set up different types of recurring transactions. Allow me to walk you through setting up your recurring credit card payments.

When processing credit card charges, you’ll need to have a written authorization from your customer before setting up recurring credit card billing. Just make sure to choose your customer’s preferred payment method and you have your customer’s credit card information.

Here's how you can set up recurring sales receipt:

1. Go to the Gear icon.
2. Select Recurring Transactions.
3. Click on the New button.
4. Choose Sales Receipt.
5. Click Ok.
6. Type in the template name.
7. Select Scheduled.
8. Enter the customer's name and complete all the necessary information.
9. Choose the Credit Card type from the list of Payments Method.
10. Click Save Template.

That should do it! An email notification will be sent to you every time recurring transactions are processed. 

Always feel free to click the reply button if you have other questions about processing credit card payments. I'm always here to help.

"Does a reoccurring sales receipt have the option to actually process the credit card charge as well?"

Yes, of course. The Intuit person explained how