How to Receive Payments in QuickBooks Online

In today’s article, we will talk about how to get or receive payments in QuickBooks Online, at the same time […]

In today’s article, we will talk about how to get or receive payments in QuickBooks Online, at the same time while counterbalancing the accounts receivable created when an invoice is generated. Not to mention, in this article, we will also state how to authenticate whether the particular payment was applied in the right manner or not.

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Dancing Numbers helps small businesses, entrepreneurs, and CPAs to do smart transferring of data to and from QuickBooks Online. Utilize import, export, and delete services of Dancing Numbers software.

If you wish to learn how to get payment when there is no invoice that has been generated, then keep reading this article on how to create QuickBooks Online Sales Receipts and send them.

Overview about Receiving Payments in QuickBooks Online

When a customer needs to pay you at a later stage, i.e., not immediately at the time of sale of a service or product, you need to keep track and record the respective payments that are being recorded in the QuickBooks Online software.

On QuickBooks Online, you can keep a consistent record of payments that you are supposed to receive for the transactions, which haven’t been paid off immediately. When the payments are received, they needed to be entered into QuickBooks and thus would be shortly reflecting in the respective financial and accounts statements.

In case, some payments are received via checks and have not been deposited in the bank yet, you need to choose Undeposited funds rather than a bank account. When the checks get cleared, you can consider transferring them from Undeposited funds to your specific bank account. Thus, even for payments that are received from different channels, you have a way to get them deposited and recorded.

Understanding what is all about receiving payments in QuickBooks Online, next you need to learn more about why is this necessary.

Why do You Need to Consider Receiving Payments in QuickBooks Online?

Once you receive the payment against an invoice, you must be recording the payment amount. In case you are recording the payment against the invoice with the help of a bank deposit or a sales receipt, then the income will be recorded as double-counted and show as outstanding.

Thus, when you receive payments in QuickBooks Online, the following benefits are likely to be gained:

Avoiding Paid Invoices to Remain Open:

When the payments are missed being applied to the correct invoice, the invoice will end up showing as outstanding although the customer might have cleared the dues for the same. Thus, when you receive payments in QuickBooks Online, it will avoid any sort of double work with errors.

Incorrect Reflection of Due Amount:

If the payments are not received in the QuickBooks Online software, the amount which is currently outstanding by the customers would be incorrectly applied.

Overstated Income:

Once the payments are received but are incorrectly recorded under the heads of deposits or recorded on sales receipts as income and thus, it will be a duplicate creation of the invoice which was already created earlier.

Steps to Receive Payments in QuickBooks Online

You must locate the open invoice and apply for payment in QuickBooks Online. It is an essential process, and some parts require close attention. Here are the steps to get payment in QuickBooks Online:

Step 1: Log into the QuickBooks Online Receive Payment

Press the + New button that is present on the top of the left side of the menu bar. Now choose Receive Payment available in the first column in the section Customers.

Step 2: Find the Open Invoice

When you open the screen for Receive Payments, you will witness a list of the invoices outstanding for the clients you have choosen. To get a payment for the outstanding invoice, you need to finish many fields on the screen for Receive Payment, as stated below:

  • Customer: Choose the customer from whom you will get a payment.
    Note: Make sure that the payment is applied to the right customer invoice. It is quite likely that the customer may be disappointed if their invoice still appears to be unpaid.
  • Payment Date: Enter the date you got the payment.
  • Payment Process: This is the process of how the customer has paid you, like credit card, cash, check, or even bank transfer.
  • Reference Number: Type the check number. In case cash was received, you can let it remain blank.
  • Deposit To: In case it is the only check that has been sending to the bank account, you can choose the right bank account. But, in case this check is added with other cash or check, then it is recommended to record the payment acquired in Undeposited Funds. For all the QuickBooks Online Accounts that are new, the Undeposited Funds Account default name is Payments to Deposit.
  • Amount Acquired: Enter the amount of the check acquired or cash received.
  • Invoice Information: For every outstanding invoice, the invoice detail will come up automatically, after a customer is choosen in the particular field A. Several invoices will come up if any specific customer has more outstanding invoices more than one.
  • Payment: Enter the part of the amount acquired in F in order to apply to every invoice that is listed in G. It will normally occupy automatically, however, it can be edited as long the particular total payments applied is the same as the total amount received.

When you are content with your payment details, press the green button for Save and Close and record the transaction.

Step 3: Ensure that the Payment has been Applied Correctly

Approve that the Payment was applied in the right manner. On the left side of the menu bar, go to Sales and then choose Customers. Now find the customer for whom you registered the payment and press on the name or anywhere on the entry line that is grayed. QuickBooks Online will show a list of the current transactions where payment was successfully applied against the outstanding invoice.

It is important to note that while confirming whether a payment is received in the right manner or not, we suggest authenticating two items:

  • Payment Recorded: Confirm that the payment registered is marked as Closed. In case a payment is marked as Open, then it has not been applied towards any invoice in the right manner.
  • Invoice Marked Paid: Confirm that the invoice for which the payment was accepted is now marked Paid.

Why It is Important to Receive Payments in QuickBooks Online?

QuickBooks provides the required tools to get and handle payments in the most efficient manner. When any customer is paying an invoice in QuickBooks, it is crucial to apply the particular payment against any invoice. In case you register the invoice payment with the help of a bank deposit or sales receipt, then income will be counted twice and the particular invoice will still be displayed as outstanding.

When payments are not registered in QuickBooks in the right manner, the most obvious issues that may occur are:

  • Exaggerated Accounts Receivable Balances: The amount that customers need to pay will be wrong if payments are not applied in the right manner.
  • Exaggerated Income and Sales: Payments acquired and recorded in the wrong manner as sales receipts or deposits will be registered as income. But, income was already registered when the actual invoice was prepared.
  • Paid Invoices Stay Open: In case payments are not applied to the right invoice, the invoice displays an outstanding even when the particular customer has already paid for it. Consequently, it will give rise to wrong collection efforts and can also impact your relationship with your clients.

In today’s article, you have learned how to acquire payments in QuickBooks Online. Now, you are aware of how to register the payments acquired for outstanding customer invoices and you comprehend the significance of accessing the Undeposited funds account.

However, If you are new to QuickBooks, then it is quite likely that you may have problems executing the steps stated above. You can also get confused and require professional help to deal with the situation. For such cases, we recommend that you get in touch with our Dancing Numbers team via LIVE CHAT.

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+1-800-596-0806 or chat with experts.

Frequently Asked Questions

Is it Possible to get Payments in the Absence of any Prior Invoice in QuickBooks?

Yes. It is possible to receive payments without any prior issued invoice; however, you must prepare a sales receipt to register the payment in QuickBooks.

How can I Confirm that the Payment was Correctly Applied while Recording the Outstanding Received?

To confirm that the payment was correctly applied while recording the outstanding received, the following steps would be the aid for the same:

  • Browse to Sales and tap on Customers.
  • Go to Customer Listing.
  • Spot the customer for whom you had recorded the payment.
  • Tap on the name to show customer detail.
  • A complete list of the latest transactions will appear for this customer.

What are the Different Types of Invoices Status in QuickBooks Online?

The different types of invoices status in QuickBooks Online are:

  • Open
  • Open (Sent)
  • Open (Viewed)
  • Paid
  • Overdue
  • Overdue (Viewed)

How can I Record Undeposited Funds in QuickBooks Online?

To record Undeposited funds in QuickBooks Online, the following steps would be the aid for the same:

  • Tap on New and choose Bank Deposit.
  • Check each payment that has been deposited along with scrutiny of reference numbers too.
  • Tap on Save and Close to finish.

What are the Causes of Undeposited Funds?

Undeposited funds enable you to assemble several checks and then cash them into one deposit in your particular check register. In the absence of any Undeposited funds, every check acquired displays a distinct deposit in the particular check register. As a result, it makes it difficult to monitor the bank statement where the checks are pooled into one single deposit amount.

Is it Possible to Record Half Payments in QuickBooks?

Yes. It is possible to register partial payments in QuickBooks. In order to do it, follow the steps below:

  • Choose the Customer along with the invoice you wish to apply the payment to.
  • Now add the amount of the partial payment in the column for Payment. It should be on the Receive Payment screen. It is possible to save the payment and then integrate extra payments on the same invoice as required.

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