Applying Payments to Invoices
Applying Payments to Invoices (6469)
A payment from a customer is usually in response to an invoice from you. To record that a payment for an invoice has been received, you apply the payment to the invoice. Applying a payment reduces the open amount by the amount of the received payment.
It's possible to receive a payment without applying it to an invoice. The payment will reduce the customer?s open amount, but unpaid invoices will continue to affect the overall balance due.
Using the Apply Payments To Invoice list, you can apply payments to invoices in two different ways:
• If you click the Auto Apply button, the payment is automatically applied starting with the oldest invoice. If the payment is larger than the open amount of the old- est invoice, the remainder is applied to the next oldest invoice. This pattern repeats until the entire payment amount is applied. This can result in partial payments of invoices. For example, suppose you have two invoices. The older one has a balance of $700 and the newer one a balance of $600. A payment of $1,000 would completely pay off the older invoice and partly pay the newer, leaving it with an open amount of $300.
• If you prefer to distribute payment amounts yourself, you can enter the amount you want to apply to each open invoice into the Applied column. For example, if you receive a payment that you don't want to apply to the oldest invoice, you can enter the amounts in the Applied column of the newer invoices.
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