Recording a payment in QuickBooks depends on how you received it
The steps change based on whether the money came through a bank deposit, a credit card, a check, or a digital wallet like PayPal or Square. QuickBooks needs to know the source of the money, which customer or client sent it, and which invoice (if any) it paid off. The fastest route is usually to let QuickBooks match the deposit to an invoice automatically, but you can also record a payment manually if the automatic match does not work.
Start by opening the Receive Payments window (in QuickBooks Online, click the + New button and select Receive Payment; in QuickBooks Desktop, go to Customers menu and choose Receive Payments). From there, you pick the customer, the invoice being paid, and the payment method, and QuickBooks updates both your bank account and your accounts receivable ledger in one step.
Key Takeaways
- Use the Receive Payments window to record money from customers, which automatically updates both your bank account and the invoice status at the same time.
- If a payment arrives through your bank feed (ACH, check deposit, or card processor), QuickBooks may suggest a match to an open invoice—review and confirm it rather than creating a duplicate entry.
- Partial payments and overpayments can be recorded in the same window; QuickBooks will leave the invoice open or create a credit for the customer.
- Payments received through third-party processors like PayPal or Square appear in your bank feed with a delay and may need manual matching to the correct invoice.
Recording a payment directly from a customer
When a customer sends you money by check, bank transfer, or card, open the Receive Payments window and select the customer's name from the dropdown. QuickBooks will show all open invoices for that customer. Click the invoice you want to mark as paid, enter the payment amount, and select the payment method (check, cash, credit card, or bank transfer).
If the payment is less than the invoice total, QuickBooks leaves the invoice open with the remaining balance. If the payment is more than the invoice, you can apply the overage to another invoice or leave it as a credit on the customer's account. Once you click Save and Close, the payment is recorded and the invoice status updates immediately.
Matching bank deposits to invoices automatically
If you have connected your bank account to QuickBooks, deposits appear in your bank feed within one to three business days. QuickBooks can suggest which invoice a deposit should be matched to based on the amount and customer name. In QuickBooks Online, go to Banking, find the deposit, and click Match if the suggestion is correct. In QuickBooks Desktop, open the Bank Reconciliation window and match deposits there.
Do not ignore these suggestions—if you skip the match, the deposit will show as undeposited money in your bank account, and your invoice will still appear open even though you have been paid. Matching takes five seconds and keeps your records accurate. If QuickBooks suggests the wrong invoice, you can change it manually or create a new match.
Handling payments from credit card processors and digital wallets
Payments through Square, Stripe, PayPal, or similar services arrive in your bank account as a single deposit, usually one to three days after the transaction. The deposit often includes a fee deducted by the processor. QuickBooks will show the net deposit amount (after fees) in your bank feed, not the full transaction amount.
You have two options: match the net deposit to the invoice it paid, or record the processor fee separately. If you want to track fees, create a separate expense entry for the processing charge and match only the net payment to the invoice. Most small businesses match the net deposit directly to keep things simple, since the fee is already visible in their bank account.
Recording partial payments and setting up payment plans
If a customer pays part of an invoice now and part later, record the partial payment in the Receive Payments window. Enter the amount received, and QuickBooks will automatically keep the invoice open for the remaining balance. The customer's account will show both the paid portion and what is still owed.
QuickBooks does not have a built-in payment plan feature, but you can track installments by recording each payment as it arrives. Some users create a note in the invoice memo field (for example, "Payment plan: $500 due on the 15th of each month") so they remember when the next payment is expected. For formal payment plans with interest or late fees, you may need to use a separate invoicing or accounting tool.
What to do if a payment does not match an invoice
Sometimes money arrives without a clear invoice attached—a customer might send a deposit, a refund, or a payment for work not yet invoiced. In the Receive Payments window, you can record the payment without linking it to an invoice. Select the customer, leave the invoice field blank, enter the amount, and choose the payment method. QuickBooks will hold the payment as a credit on the customer's account until you create an invoice or apply it later.
If the payment is from someone who is not yet a customer in QuickBooks, you can create a new customer record on the spot. Click the customer dropdown, select Add New, fill in their name and contact details, and continue recording the payment. This keeps your customer list current and ensures future payments from them are easy to match.
Reconciling received payments with your bank statement
After you record payments in QuickBooks, you should reconcile your bank account monthly to make sure the recorded payments match what your bank shows. In QuickBooks Online, go to Accounting and select Reconcile. In QuickBooks Desktop, go to Banking and choose Reconcile. QuickBooks will list all deposits and withdrawals and ask you to check them off against your bank statement.
If a payment you recorded in QuickBooks does not appear on your bank statement yet, leave it unchecked during reconciliation. Once it clears the bank, check it off in the next month's reconciliation. If a payment appears on your bank statement but not in QuickBooks, you may have forgotten to record it—go back and add it to the Receive Payments window.
Frequently Asked Questions
Can I record a payment before the money actually arrives in my bank account?
Yes. You can record a payment in QuickBooks as soon as the customer tells you it is on the way. When the money actually arrives, match it to the payment you already recorded. This is common for checks in the mail or ACH transfers that take a few days to clear.
What happens if I record a payment twice by mistake?
QuickBooks will show the invoice as overpaid. Go back to the Receive Payments window, find the duplicate entry, and delete it. If the duplicate has already been reconciled with your bank, you may need to undo the reconciliation first, delete the duplicate, and then reconcile again.
How do I record a payment if the customer's name on the deposit does not match their name in QuickBooks?
Open the Receive Payments window and search for the customer by their QuickBooks name, not the name on the deposit. Once you select the correct customer, you can add a note in the memo field (for example, "Received from John Smith, DBA Smith Consulting") so you remember where the money came from.
Can I record a payment that covers multiple invoices at once?
Yes. In the Receive Payments window, select the customer and then check the boxes next to each invoice you want to mark as paid. Enter the total payment amount, and QuickBooks will split it across the invoices you selected. If the payment does not cover all of them equally, you can adjust the amount applied to each one manually.
What if a customer sends a payment but does not say which invoice it is for?
Contact the customer and ask. If you cannot reach them, record the payment as a credit on their account (leave the invoice field blank in Receive Payments) and apply it to an invoice once you know which one they meant to pay. QuickBooks will hold the credit until you decide where it goes.