How to apply payments to invoices in QuickBooks

Intuit sets two conditions for linking a customer's deposit to an invoice: the customer has an invoice in QuickBooks, and no payment has been entered and linked to that invoice yet.

QuickBooks looks for records with the same amount, dated from 90 calendar days before the bank transaction to 20 calendar days after it, and offers those as suggested matches. Expect no suggestion when fees or a discount make the amounts differ, when several payments reached the bank as one deposit, or when the record sits outside that window. A record that has already been reconciled can't be matched either, and Intuit's advice then is to exclude it.

The banking page comes in two versions that label a few things differently, and the steps below follow the version Intuit describes first.

1. Go to All apps, select Accounting, then select Bank transactions. Filtering by date or description helps narrow down a long list.
2. On the Pending tab, find the customer's deposit you want to apply to the invoice.
3. Look in the Categorise or Match column. Where QuickBooks has a suggested match, select the transaction or the sparkle icon to expand the row, then select the suggestion in the Match suggestion column for more detail.
4. If the suggestion is the right record, select Post, and the deposit is matched.
5. If no suggestion appears, select Find match. If the suggestion is the wrong record, select Find other match.
6. On the Find other matches page, tick the box for the open invoice this deposit pays.
7. Select Match.

To spread one payment over several invoices, select + New (or + Create), choose Receive payment and pick the customer. Under Outstanding Transactions, tick every invoice the payment covers. QuickBooks puts each invoice's open balance in the Payment column, and together those can come to more than the customer sent.

Change the Payment amounts so they add up to what was actually received. Amount received then shows the Payment column total, and any gap between the amount to apply and the amount received appears as an amount to credit. Select Save and close.

A matched deposit leaves the Pending tab and is linked to the invoice, so the money the bank received and the sale it pays for are tied together in QuickBooks. Intuit's reason for linking them is that it keeps your records accurate and heads off errors when you reconcile the account later.

You can undo a match. From Transactions, open the Posted tab, choose the account, and select the undo icon in the Undo column. The transaction returns to the Pending tab, ready to match again. On the other version of the page, go to Bank transactions, open the Posted tab and select Undo in the Action column. Intuit suggests making changes like this before your monthly reconciliation.

To confirm what the customer still owes afterwards, go to Reports, select Standard reports, and run the Customer Balance Summary report. Their open balance is in the Total column.

No suggestion because the bank line is several payments added together? Intuit's answer is a bank deposit. Put each payment into the Undeposited Funds account, then select + New (or + Create), choose Bank deposit and pick the bank account from the Account dropdown. Tick each payment that made up the deposit, check the total matches your deposit slip, and save it. Make one bank deposit for each deposit slip. QuickBooks can then match the grouped payments to the single line from your bank.

If the bank took a fee, don't edit the original payments. Intuit's method adds the fee on the Bank deposit page instead: scroll to the Add funds to this deposit section and enter the fee as a line item with a negative amount, using the Bank charges and fees account.