Receiving Customer Payments

A receipt records money a customer has paid you: a check, a wire, an ACH transfer. Recording the receipt puts the money in a cash account and reduces what the customer owes. You then apply (allocate) the receipt to the invoices it pays, so each invoice shows the right open balance and becomes Paid when it is settled.

A receipt is posted the moment you save it; there is no draft. Most companies record checks into Undeposited Funds, a holding account for money received but not yet taken to the bank, and then group them into one bank deposit; see Making Deposits.

Before You Begin

• The customer is active and has posted invoices. You can also record a payment that is not yet tied to an invoice (see Overpayments and Unapplied Amounts).
• The account the money goes into exists as a bank or cash account in the Chart of Accounts, for example 1050 Undeposited Funds or 1010 Operating Checking.
• You need Edit access to Customers & Invoices. Company Admins, Accountants and Project Managers have it; Viewers do not. See Roles and Permissions.

Navigation

Customers & Invoices → Receipts → Receive Payment, or Create → Receive Payment at the top of any page. Receive Payment on an open invoice, on a customer's page and on the overview opens the same page with the customer already chosen.

The Receipts List

Figure 2-35 The Receipts list of the sample company.

1. Receive Payment opens the page for a new receipt.
2. Search finds receipts by number or customer name.
3. Status: Posted (the default), Reversed or All.
4. Funds Account: the account the money went into.
5. Unapplied: the part of the receipt not yet applied to an invoice.

The Receive Payment Page

Figure 2-36 The Receive Payment page, before a customer is chosen.

1. Balance Date: the date the open invoices and their balances are worked out for. It starts as today.
2. Customer: who paid. Choosing a customer loads their open invoices.
3. Load Open Items reloads the invoices after you change the balance date.
4. Date: the receipt date, the accounting date of the payment.
5. Funds Account: where the money goes.
6. Amount: the total received.
7. The Allocations table: the customer's open invoices, with an Allocate box for each.
8. Summary: the amount, how much is allocated and what is left unapplied.

Step by Step

Choose the Customer

1. Open Customers & Invoices → Receipts and click Receive Payment.
2. In Customer, start typing the name and choose the customer. The page reloads with the customer's name above the form and their open invoices in Allocations.
3. To see balances on another day, change Balance Date and click Load Open Items. The receipt Date follows the balance date.

Enter the Receipt

1. Check Date, the day the payment was received.
2. Choose the Funds Account: 1050 Undeposited Funds for checks you will take to the bank later with other receipts, or the bank account itself, such as 1010 Operating Checking, when the money is already in the bank.
3. Type the Amount received.
4. Optionally record the Method (for example check or ACH) and the Reference (for example the check number), and a Memo.
5. Optionally click Attach Supporting Documents to add a scan of the check or the remittance advice (up to 3 files of 5 MB each).

Figure 2-37 Only bank and cash accounts are offered.

1. A bank account, for money already deposited.
2. Undeposited Funds, for money waiting to be deposited.

Apply It to Invoices

1. In Allocations, type the amount paid on each invoice in its Allocate box. You can apply one receipt to several invoices.
2. Watch the Summary: Allocated adds up the allocations and Unapplied shows what is left of the amount.
3. Click Receive Payment. Cancel returns to the list without saving.

Figure 2-38 A partial payment from Larkspur Dental.

1. The customer, chosen above.
2. Funds Account: 1050 - Undeposited Funds.
3. Amount: the 25,000.00 received.
4. Reference: the customer's check number.
5. Allocate: 25,000.00 applied to INV-2026-000054, whose balance is 39,885.00.
6. Unapplied: 0.00, because the whole receipt is applied.
7. Receive Payment posts the receipt.

The receipt's page opens. Receipt numbers are assigned automatically as RCPT-year-sequence.

Starting From an Invoice

Receive Payment on an open invoice (or on an overdue invoice in the overview) chooses the customer and fills in both the Amount and that invoice's Allocate box with its open balance:

Figure 2-39 Receive Payment opened from invoice INV-2026-000050.

1. The customer of the invoice.
2. Amount: the invoice's open balance.
3. Allocate: the same amount on that invoice.

Choose the Funds Account, check the amount against the check, and click Receive Payment. Receive Payment on a customer's page chooses the customer but leaves the amounts for you to enter.

Partial Payments

When the customer pays less than an invoice's balance, allocate what was paid. The invoice stays Open with the label Partly Paid (or Overdue, once past its due date), and its Open Balance drops by the amount received. A later receipt pays the rest.

Overpayments and Unapplied Amounts

When the Amount is more than you allocate, the rest stays on the receipt as unapplied credit. It still reduces the customer's balance, appears in the Credits Available tile of the customer's page and in the AR Aging report, and waits to be applied to a future invoice or refunded.

Figure 2-40 A receipt larger than the invoices it pays.

1. Amount: the 20,000.00 received.
2. Allocated: the 14,040.00 applied to the open invoice.
3. Unapplied: 20,000.00 − 14,040.00 = 5,960.00 left as credit.

You can also record a payment with nothing allocated, for example a deposit received before you invoice; the whole amount is then unapplied.

Applying Unapplied Credit Later

When a receipt has unapplied credit, its page shows an Apply Credit button and an Apply Credit section: Allocate unapplied credit to the selected open items.

1. Open the receipt and go to Apply Credit.
2. Set the Date of the application. It cannot be before the receipt date.
3. Type amounts in the Allocate boxes of the customer's open invoices.
4. Click Apply Credit.

The invoices' balances drop and the receipt's Unapplied amount shrinks. Applying credit writes no journal entry: the money was already recorded when the receipt was posted.

Apply Credit Not Shown

Every receipt in the sample company is fully applied, so there is no screenshot of the Apply Credit section. It uses the same Allocations table as the Receive Payment page.

To pay unapplied credit back to the customer instead, record a customer refund in Banking; see Recording a Refund.

The Receipt Page

Figure 2-41 A posted receipt, still in Undeposited Funds.

1. Posted: the receipt is recorded. A reversed receipt shows Reversed.
2. Deposit opens Make Deposit. It appears while the receipt has not yet been included in a deposit.
3. Reverse Receipt… opens the reverse panel.
4. Funds Account: where the money went.
5. Unapplied: what is left to apply. When it is more than 0.00, an Apply Credit button appears at the top.
6. Unapply… takes the allocation back off the invoice.

The Allocations table lists each invoice the receipt paid, with the date of the allocation. Below it are the Posting Entry, a Reversal Entry once reversed, any Refunds, and the History.

Unapplying and Reversing a Receipt

Unapplying an Allocation

Unapply an allocation when the money was applied to the wrong invoice. The receipt stays posted; only the allocation is taken back.

1. On the receipt's page, click Unapply… next to the allocation.
2. Set the Date of the change. It cannot be before the allocation date.
3. Click Unapply.

Figure 2-42 Unapplying the allocation to INV-2026-000050.

1. Date: when the allocation is taken back.
2. Unapply takes it back.

A negative row dated on that day appears under the allocation, the invoice goes back to Open with its balance restored, and the amount becomes unapplied on the receipt, ready to apply to the right invoice. No journal entry is written.

Reversing a Receipt

Reverse a receipt that should not have been recorded: a bounced check, a duplicate, a payment entered for the wrong customer.

1. On the receipt's page, click Reverse Receipt….
2. Set the Date of the reversal (it cannot be before the receipt date or in a closed period) and, optionally, a Memo.
3. Click Reverse Receipt. Cancel closes the panel.

Figure 2-43 The reverse panel. Reverse the original movement on the date entered.

1. Date: the accounting date of the reversal.
2. Memo: an optional reason.
3. Reverse Receipt reverses it.

Structally writes a reversal entry on that date, takes back every allocation (each invoice returns to Open), and marks the receipt Reversed. A receipt already included in a deposit must have the deposit reversed first.

Figure 2-44 A reversed receipt in the sample company.

1. Reversed: the receipt no longer counts.
2. The allocation taken back on the reversal date, with Reverses Date pointing to the original allocation.
3. Reversal Entry: click it to see the reversing journal entry.

Field Reference

Field	Description	Required	Example
Balance Date	The date open invoices and balances are shown for. Also sets the starting receipt date.	No	10/24/2026
Customer	Who paid. Active customers only.	Yes	Larkspur Dental
Date	The receipt date and accounting date. Must not be before the date of any invoice it pays, and must be after the Books Closed date.	Yes	10/24/2026
Funds Account	The bank or cash account the money goes into.	Yes	1050 - Undeposited Funds
Amount	The total received, positive, up to two decimals.	Yes	25,000.00
Method	How the customer paid, up to 20 characters.	No	check
Reference	The check or transaction number, up to 60 characters.	No	10482
Memo	A note shown on the receipt.	No	Partial payment, PO 7713
Allocate	The amount applied to each open invoice. At most the invoice's balance; all allocations together at most the Amount.	No	25,000.00
Attach Supporting Documents	Up to 3 files of 5 MB each.	No	Check-10482.pdf

Worked Example: A Partial Payment

On October 24, 2026, Larkspur Dental sends check 10482 for $25,000.00 toward invoice INV-2026-000054 ($39,885.00). You record it into Undeposited Funds and allocate the whole check to the invoice, as in the figure above.

Item	Amount
Invoice INV-2026-000054	$39,885.00
Check 10482 applied	$25,000.00
Still open on the invoice (39,885.00 − 25,000.00)	$14,885.00

Receiving the payment records this entry:

Account	Debit	Credit
1050 Undeposited Funds	25,000.00
1100 Accounts Receivable		25,000.00

INV-2026-000054 stays Open, now Partly Paid, with an open balance of $14,885.00. When you take the check to the bank, a deposit moves the $25,000.00 from 1050 Undeposited Funds to 1010 Operating Checking.

What Happens After You Receive a Payment

	Result
Receipt status	Posted; Reversed if you reverse it
Journal entry	One entry on the receipt date: debit the funds account, credit Accounts Receivable for the full amount (applied and unapplied), locked
Invoices allocated	Open balance reduced; Paid when nothing is left
Customer balance	Reduced by the full amount
Undeposited Funds	Holds the receipt until it is included in a deposit, if you chose it
Can be changed	No; unapply allocations, apply unapplied credit, or reverse the receipt

The Posting Entry

Open Posting Entry on the receipt's page to see its journal entry:

Figure 2-45 The posting entry of RCPT-2026-000066.

A receipt always debits its funds account and credits Accounts Receivable for the whole amount. Applying, unapplying and re-applying credit move amounts between invoices of the same customer and write no entry. Reversing writes the opposite entry on the reversal date.

Common Mistakes and Troubleshooting

Message or Symptom	Why It Happens	What to Do
No open items at this date.	The customer has no unpaid posted invoice on the balance date.	Check the customer and the Balance Date, or record the payment as unapplied credit.
Allocations exceed receipt amount	The allocations add up to more than the Amount.	Raise the amount or lower the allocations.
Allocation exceeds invoice balance	More was allocated to an invoice than it owes on the receipt date.	Allocate at most the invoice's balance; leave the rest unapplied.
Receipt date is before invoice date	The receipt is dated before an invoice it pays.	Correct the receipt date.
Invoice must be open; status is paid	The invoice was paid by another receipt or credit in the meantime.	Reload the open items with Load Open Items.
Customer must be active.	The customer was deactivated.	Reactivate the customer first.
Accounting date must be after the company closing date.	The receipt date is in a closed period.	Use a later date, or ask a Company Admin.
Receipt is deposited; reverse the deposit first	The receipt is part of a posted deposit.	Reverse the deposit in Banking, then the receipt.
Receipt has refunds; reverse them first	Part of the receipt was refunded.	Reverse the refund in Banking first.
Entry is matched to a bank line; unmatch it first	The receipt is matched in the bank feed.	Unmatch it in Reviewing the Bank Feed.
Reversal date cannot be earlier than the journal entry date.	The reversal is dated before the receipt.	Use the receipt date or later.
Allocation date is before receipt date	Apply Credit was dated before the receipt.	Use the receipt date or later.
Allocations exceed unapplied receipt amount	You applied more credit than is unapplied.	Lower the allocations.
Unapply date is before allocation date	The unapply date is earlier than the allocation.	Use the allocation date or later.
A receipt was recorded in the bank account but the money was deposited with other checks.	It should have gone to Undeposited Funds.	Reverse it and record it again into Undeposited Funds, then make the deposit.

Related Topics

• Making Deposits
• Recording a Refund
• Credit Memos
• Posting, Editing, and Voiding Invoices
• Aging Reports and Customer Statements
• Reconciling an Account