How to receive a payment in QuickBooks Online
Step by step
- Select + Create, then Receive payment. (You can also start from the customer's page.)
- Choose the Customer. Their open invoices appear under Outstanding Transactions.
- Set the Payment date, the Payment method (for example, Check) and, for a check, the check number as the Reference no.
- Choose Deposit to: Undeposited Funds if you'll take it to the bank with other payments, or your bank account if it went straight in.
- Enter the Amount received.
- Select the checkbox next to each invoice this payment covers, and check the amount in the Payment column.
- Select Record and close (called Save and close in some versions).
Undeposited Funds may appear as "Payments to deposit" in some QuickBooks Online companies. It's the same holding account.
Common situations
| Situation | What to do |
|---|---|
| One check pays several invoices | Select every invoice it covers. The amounts in the Payment column must add up to the amount received |
| The customer pays only part of an invoice | Enter the smaller amount. The invoice stays open for the rest |
| The customer pays more than they owe | QuickBooks keeps the extra as a credit you can apply to a later invoice |
| There's no invoice (they paid on the spot) | Don't use Receive payment. Record a sales receipt |
What it does to your books
Receiving a payment moves money out of accounts receivable (what customers owe you) into Undeposited Funds or your bank account. Income doesn't change, because it was counted when the invoice was created.
| Account | Debit | Credit |
|---|---|---|
| Undeposited Funds (or Checking) | $240 | |
| Accounts receivable | $240 |
If you used Undeposited Funds, record a bank deposit when the money reaches the bank. That moves it from Undeposited Funds into Checking, so your books match your bank statement.
Common questions
Why is my invoice still open after the customer paid?
The payment was probably recorded as a sales receipt or a bank deposit instead of with Receive payment, so it was never linked to the invoice. Record it with Receive payment and remove the extra transaction.
What is Undeposited Funds in QuickBooks Online?
A holding account for payments you've received but not yet taken to the bank. Grouping them there lets you record one bank deposit that matches the single deposit on your bank statement.
Related guides
Sources
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