How to receive payments in QuickBooks Online

In this tutorial you will learn how to receive payments in QuickBooks Online while offsetting the debtors created when you issued an invoice, as we co

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In this tutorial you will learn how to receive payments in QuickBooks Online while offsetting the debtors created when you issued an invoice, as we cover how to record payments received on outstanding customer invoices. If you want to learn how to receive payment when no invoice has been issued, then move on to our next tutorial, How to Create and Send QuickBooks Online Sales Receipts.

We’ve created it to help you get better at using QuickBooks, our best small business accounting software. To make the most of it, follow along in your own QuickBooks Online account. If you do not have one yet, you can sign up for a free trial of 30 days or get a 50% discount for three months.

This lesson, which is part of our Free QuickBooks tutorial series, includes a tutorial video and illustrated instructions that provide the same information.

Click on the + New button at the top of the left menu bar and then select Receive payment in the first column below Clients as shown below.

Arrow to go to the QuickBooks Online Receive Payment screen.

Go to the QuickBooks Online Receive Payment screen

On the QuickBooks Online Receive payment screen, you can locate the correct invoice by doing the following:

View from QuickBooks Online Receive payment screen.

QuickBooks Online Receive payment screen

A customer: Select the customer from whom you received a payment. All the invoices with an outstanding balance for that customer will then be in the Outstanding transactions section.


Make sure you apply the payment to the correct customer invoice. Your customer may get upset if they find that their invoice still appears to be unpaid.

B. Payment date: Enter the date you received the payment.

C. Payment method: Choose from Cheque or Cash as the method of payment. If your customer pays by credit card, we’ll see a tutorial on how to manage credit card sales.

D. Reference No .: Enter the check number or leave it blank when cash is received.

E. Deposit to: If this is the only check deposited into your bank account, you can select the appropriate bank account. However, if this check will be combined with other checks or cash, you will need to record the payment received in Undefeated Funds. You may want to take a closer look at how to record bank deposits to understand what happens to customer checks after they have been posted to Unsecured Funds. For newer QuickBooks Online accounts, the default name for the non-deposited fund account is Payments to deposit.

The reasons behind Non-Deposit Funds:

Unfunded funds allow you to group multiple checks and cash into a single deposit in your check register. Without unsecured funds, each check received appears as a separate deposit in the check register, making it difficult to trace to the bank statement where checks are combined into a single deposit amount.

F. Amount received: Enter the amount of cash or check received.

G. Invoice details: The invoice details will automatically appear for each outstanding invoice as soon as a customer is selected in field A. Multiple invoices will appear if a customer has more than one outstanding invoice.

H. Payment: Enter the portion of the amount received in F to apply to each invoice listed in G. It will usually fill in automatically but can be changed as long as the total payments applied match the total amount received.

When you are satisfied with your payment details, click the green Save and close button to record the transaction.

Move over the left menu bar Sales and then choose Clients:

Arrow navigate to client list in QuickBooks Online.

Go to client list in QuickBooks Online

Now find the customer for whom you signed up for a payment and click on their name or anywhere on the gray entry line.

Display customer details in QuickBooks Online.

View customer details in QuickBooks Online

QuickBooks Online will display a list of recent transactions for this client. We recommend that you verify the two items below.

Client Transaction Details in QuickBooks Online.

Client Transaction Details in QuickBooks Online

A. Invoice marked Pay: Verify that the invoice for which payment was received is now marked “Paid”.

B. Payment recorded: Verify that the payment recorded is marked “Closed”. If a payment is marked “Open”, it has not been properly applied to an invoice.

When a customer pays an invoice, it is important to apply the payment against the invoice, as demonstrated in this tutorial. If you record the invoice payment with a sales receipt or bank deposit, the revenue will be doubled, and the invoice will still be shown as outstanding.

When payments are not properly recorded in QuickBooks, the common problems that may occur are:

You have just learned how to receive payments in QuickBooks Online. You now know how to record payments received on outstanding customer invoices, and you understand the importance of using the unsecured fund account. The next tutorial in our QuickBooks Online Training Course is How to Create and Send QuickBooks Online Sales Receipts, where you will learn how to receive payments from customers when an invoice has not been issued.


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