This article deals only with the customer payment application process in Quickbooks DESKTOP and NOT the corresponding bank deposit process, which is covered in another article from AccuraBooks.
To apply customer payments in Quickbooks Desktop:
1. Click on the Customers drop-down menu and choose Receive Payments
2. Click on the Received From drop-down menu and choose the customer name that you received payment from.
a. Note: Be sure to choose the correct sub-job if this customer is paying you for different types of projects for which you created different sub-jobs for in the customer’s profile.
3. Tab to the payment amount and enter in the amount of the customer’s payment.
a. Note: All of the open invoices should populate automatically beginning in the middle of the screen.
b. Note: Depending on your settings, Quickbooks may automatically apply the payments for you once you enter in a dollar amount. I do not recommend to have Quickbooks do this for you however.
4. Enter in the actual date you received the customer’s payment.
5. Choose the payment method the customer paid with.
a. Note: You can always create more befitting customer type payment options in the More button which is to the right side of the payment type option button choices. Just click on More and then click on Add New Payment Method.
6. Fill in the Reference # field if you want to track this, such as the check payment number or any other reference number/identifier that can identify this specific payment you received from the customer.
7. Depending on your Quickbooks settings you may also have to click on a drop-down menu for “Deposit To” to choose an actual asset (bank or undeposited funds) account where this payment will go next. If you do not see this option, then your payments will always go to the Undeposited Funds account in Quickbooks where you will have to take a further step later on to post the deposit into your bank account in Quickbooks.
8. Check off the open customer invoices where you would like to apply this customer’s payment against.
a. Note: If the customer is short-paying you (perhaps due to some sort of discount or previous credit) and you want to write off the remaining amount within this screen:
i. Simply click on the Discounts and Credits button towards the top.
ii. Click on the Discount tab.
iii. Enter in the amount of the discount and also where you would like Quickbooks to post this discount in the Discount Account drop-down menu.
iv. Click Done.
b. Note: If you want to apply a previously entered CREDIT towards this open invoice:
i. Simply follow the same steps for applying a discount, however click on the Credits tab within the Discounts and Credits pop-up screen and check off the available credits to apply to this customer’s invoice. You can type in a specific amount to use within this screen as well if you do not want to apply the entire credit right now.
9. Now, getting back to the main payment screen: At the bottom of this screen, you can enter in a special memo as well.
10. Before you click on Save & Close or Save & New, be sure to look over the entire payment screen and:
a. Ensure you have checked off the correct open invoices you want to apply payment to.
b. Ensure the Payment amount listed for each checked-off invoice on the far right side has the correct amount you want to apply against. If this is not correct then be sure to type in the correct amount here. Overall be sure all of the payments applied on the right side of each checked off invoice add up to the entire Payment Amount you entered in at the top.
11. Click Save & Close or Save & New.