Resolve Common Issues When Applying A Payment Towards An Invoice

In this article we are going to learn various processes to make payments in QuickBooks Desktop like refunding payments, multiple payment methods, reapplying payments options, etc. If you need any assistance while creating a standard process for creating invoices and receiving payments then you can contact QuickBooks Support Phone Number +1888-529-1015 where our experts will tell you about the procedure.

Resolve Common Issues When Applying A Payment Towards An Invoice

Scenario 1: Use Multiple Payment Methods Towards An Invoice

In order to use multiple payment methods towards an invoice follow the below steps:

Step 1: Create A Cash Payment Item

  • Open QuickBooks and select List Menu and then select Item List.
  • Choose Select New Item from the item drop down.
  • Select Payment for the item type.
  • In the Item Name/Number field, enter Cash Payment.
  • If you want to the payment in Undeposited Funds account, then Click the radio button for Group with other undeposited funds. Else click on Deposit To option and choose the bank account where you want to deposit the payment.
  • Choose Ok

Step 2: Create The Invoice

  • From the navigation bar go to Customers menu and then select Create Invoices
  • Choose a customer or customer job from Customer: Job drop-down. Click Add New if you cannot find customer or Job in the drop-down.
  • Enter the required details at the top of the form.
  • Choose the item in the detail area.
  • Note: Use two separate lines for receiving payments through cash and credit card.
  • Choose the cash payment item and enter the amount on the amount column to receive the payment in cash. Make sure that cash payment shows as a negative amount and Total and Balance due is equal to the amount which will be paid using a credit card.
  • Select the Save option and then Close the window.

Step 3: Record The Payment

  • Go to Customers menu and select Receive Payments
  • From the Received drop-down ,choose the customer or customer job.
  • Type the Amount and verify the Date.
  • Type the Check #or Reference.
  • Select the correct credit card for the payment.
  • Select the invoice(s) to pay with a credit card.
  • Press Save & Close.

Scenario 2: Correct And Re-apply Payments That Were Applied To The Wrong Invoice

If the automatic payment is applied in QuickBooks then any payment will directly be posted to the oldest open invoice. Some business may not prefer payment in this manner. You can correct and re-apply the payments by following the below steps:

  • Open the invoice where you want to avoid the payment.
  • Open Report tab and select Transaction History.
  • Choose Payment and click Go To.
  • Unmark the invoices where you do not want apply payment in the customer payment window.
  • If required, you can change the amount in the payment column by clicking on it.
  • Now mark the invoice where you want to receive the payment
  • Choose Save & New.

You can also avoid QuickBooks to apply for automatic payment by setting up the preferences. You can follow the below steps:

  • Go to Edit menu and Choose Preferences.
  • From the left side choose Payments and then select the Company Preferences
  • Now you can Check or Uncheck the Automatically apply payments as preferred on the Receive Payments section.

Scenario 3: Apply A Payment From One Customer That Has Invoices In More Than One A/R account.

Follow the below steps:

Step 1: Apply The Full Check amount to Invoice(s) in one of the A/R accounts.

  • Go to the Customers menu and Choose Receive Payments.
  • Click the A/R Account drop-down and choose the first A/R account.
  • Enter the total amount of the check.
  • Select the invoices for the payment and leave the remainder as a credit.

Step 2: Move The Credit From The First A/R Account To A ‘Wash’ Account.

  • Go to the Company menu and choose Make General Journal Entries.
  • Select the first A/R Account from the first line and then enter the Customer Name and provide the amount in the Debit column.
  • Select a wash account in the second line and in the Credit column, type the amount you want to move from the A/R1 account.
  • Choose Save & Close.

Step 3: Move The Credit From The Wash Account To The Second A/R account.

  • Open the Company menu and then choose Make General Journal Entries.
  • Select the Second A/R account in the first line and in the Credit column, type the Customer Name and enter the Amount.
  • In the second line select the Wash Account then type the Amount in the Debit
  • Choose Save & Close

Step 4: Apply The Credits In The Remaining A/R Accounts To The Invoice(s).

  • Go to the Customers menu and choose Receive Payments.
  • Select the Customer: Job and the A/R Account.
  • Choose the invoice on which you want to apply the credit.
  • Choose the Discounts and Credits
  • Use the available credit to pay the invoices.

Scenario 4: Edit Customer Payment That Was Recorded Incorrectly

You have to check the transaction history to find out the transaction which was a partial payment but was recorded as full payment .Follow the below steps:

  • Open the invoice which has incorrect payment applied.
  • Click on the Transaction History from the Reports
  • A window of Payment History-Invoice will pop up. Select the payment line and then choose Go To option.
  • Enter the correct amount of payment to the amount received.
  • Select Save and then Close.
  • Click Yes when the Recording Transaction window appears with the following message: This payment has been used to pay Invoices. Changing it will alter the way it is applied to those Invoices. Do you want to change it anyway?

Scenario 5: Refund A Payment To Allow Customer To Pay With A Different Payment Method

Follow the below steps :

  • Initiate a refund for the original payment.
    • Open the Customers menu and select Create Credit Memos/Refunds.
    • Go to Customer: Job field and type the Customer Name.
    • Choose the item and enter the amount.
    • Select Save & Close.
    • Select Give A Refund in the Available Credit window and then Select OK.
    • Enter the Amount in the Issue a Refund window and select the correct payment method for the refund.
    • Ensure that the Process Credit Card Refund when saving is:
      • Checked: if you want to process the payment online.
      • Unchecked: if the payment does not need to be processed online or it is already made.
    • Choose OK.
  • Remove the Credit Memo linked with the refund. It will un-link the two transactions.
    • Browse and double-click on the Credit Memo.
    • Press Ctrl+D on your keyboard.
    • Select OK when Delete Transaction prompt appears.
  • Open the Original Payment and unmarked the invoice and check the refund. it will link the payment to the refund and leave the invoice open.
  • Pay the original invoice through the replacement or new payment method.

Scenario 6: Your Customer Paid Your Vendor Directly For The Materials You Used To Provide Service To Them

Receive payment from the customer and leave balance as underpayment.

  • Go to the Customer
  • Select Receive Payments.
  • Choose the Customer: Job.
  • Select the invoice and type the amount that the customer is paying.
  • Choose Leave as Underpayment.
  • Choose Save & Close.

Create a clearing account.

  • Open Lists menu and then choose Chart of Accounts.
  • Click the Account drop-down and choose New.
  • Select Income as the account type and choose Continue.
  • Use Clearing as account name and Select Save & Close.

Create two journal entries to move customer balance to your vendor.

  • Open the Company menu and choose Make General Journal Entries.
  • if required , Assign Date and Entry NO.
  • Set the first Journal as Credit to Accounts Receivable and Debit to Clearing account. Verify that you select the Right Customer in Accounts Receivable line.
  • Set the second journal as Debit to Accounts Payable and Credit to Clearing account. Ensure to select the right vendor in Accounts Payable line.

Apply credit to vendor’s bill.

  • Open the Vendors menu and then click Pay Bills.
  • Choose the correct vendor and bill.
  • Press Set Credits
  • Choose the correct credit and click Done.
  • Choose Pay Selected Bills

Get Technical Help For Payment Issues

With the help of the above scenarios, you got a detailed explanation about the possible error and their solutions. If you require any help for performing the above steps then you can contact QuickBooks Tech Support Number +1888-529-1015 to contact our technical experts. Our team has skilled and experienced professionals who will resolve all kinds of QuickBooks issues instantly. You can also share your queries on QuickBooks Live Chat Support where you will get Step by step resolution.  

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