In the past prepayments from customers would automatically deduct from a new invoice, but not anymore. The amount now shows as overdue in the customer account?

Hi there, i8kruger.

I'll provide information on why the prepayments from customers wouldn't now automatically deducted from a new invoice. Then, share steps to show the overdue invoice as paid.

It could be the Automatically apply credits feature is turned off that's why the prepayments were not automatically applied to an invoice. And, the reason the amount now shows as overdue in the customer's account. To fix this, I suggest to manually link the available credit note of the customer to the open invoice.

Here's how:

1. Click the + New icon at the left panel.
2. Choose Receive payment.
3. Enter the customer’s name. Make sure you choose the same customer or project you selected in the invoice.
4. In the Outstanding Transactions section, choose what invoice you want to apply to the credit note.
5. From the Credits section, select the credit note. Then, in the Payments column, enter how much credit your customer wants to use.
6. Make sure the total to pay (if any) is correct after applying the credit note.
7. Select Save and close.

For additional information, you can click this article: Create and apply credit notes or delayed credits in QuickBooks Online.

Once done, you can follow the steps below on how to turn on the feature for automatically apply credit to the open invoices.

1. Click the Gear icon.
2. Select Account and settings.
3. Go to the Advanced tab.
4. Click the Pencil icon in the Automation section.
5. Check the Automatically apply credits box.
6. Hit Save, then Done.

Please check this article to see steps on how you can apply for the deposit entry as an invoice payment: How to link a deposit to an invoice.

Please know that you're always welcome to post if you have any other concerns. Wishing you and your business continued success.

The "Automatically apply credits" option in the Automation section no longer shows on my account. I've reached out to customer support. From what I was told, there's an issue with some accounts. They suddenly closed my case (under escalation INV-51011) and received no further notifications. Any updates? (Incognito mode, clearing browser history, using a supported browser, and so on hasn't helped, unfortunately)

Thanks for joining this thread, leal5264.

Currently, our team is still investigating why some users no longer have the Auto Apply Credits in the Advanced settings of QuickBooks Online. As a workaround, you can manually apply it by following these steps:

1. Go to the +New button and select Receive payment.
2. Select the Customer, the invoices on the Outstanding Transactions section, and the Credits.
3. Make sure the amount received is zero. Tap Save and close.

For the detailed steps, here's how to create and apply credit notes or delayed credits in QuickBooks Online.

I'll be here if you need anything else. Wishing you all the best!