How to Receive Payment on an Invoice in QuickBooks Online 

Getting paid is the good part of running a business — but only if the payment is recorded correctly in QuickBooks Online (QBO). If payments aren’t applied properly, you can end up with unpaid invoices that were actually paid, unapplied payments, or bank deposits that won’t reconcile.

This step-by-step guide walks you through how to receive payment on an invoice in QuickBooks Online using the new interface, plus a few common mistakes to avoid.

Before You Start

Make sure you have:

• An invoice already created in QuickBooks Online
• Confirmation that the customer has paid (or is paying now)
• The payment details:
  • Payment date
  • Payment method (check, ACH, credit card, cash, etc.)
  • Where the money was deposited

Option 1: Receive Payment Directly From the Invoice (Recommended)

This is the cleanest and most reliable way to record a payment.

1. Go to Sales → Invoices
2. Find and open the unpaid invoice
3. Click Receive payment (top right corner)
4. Review and complete the payment details:
   • Payment date
   • Payment method
   • Reference number (optional but helpful)
   • Deposit to:
     • Undeposited Funds (most common)
     • or your bank account if the payment went straight to the bank
5. Click Save and close

Once saved:

• The invoice status changes to Paid
• Accounts Receivable is reduced
• The payment is ready to be matched to the bank deposit

Option 2: Receive Payment Using the “Receive Payment” Screen

This option is helpful when a customer pays multiple invoices at once.

1. Click + New → Receive payment
2. Select the customer
3. Choose the open invoice(s) being paid
4. Enter:
   • Payment date
   • Payment method
   • Amount received
5. Select the Deposit to account
6. Click Save and close

Choosing the Correct “Deposit To” Account

This step matters more than most people realize.

Use Undeposited Funds when:

• You batch multiple payments together
• Checks are deposited together
• You want your bank deposit to match exactly

Use your Bank Account when:

• The payment goes directly to the bank
• You’re recording an ACH, Stripe payout, or similar direct deposit

If your bank feed doesn’t match later, this is usually the reason.

What Happens After You Receive the Payment

After the payment is recorded:

• The invoice shows as Paid
• Accounts Receivable decreases
• The payment appears in:
  • Undeposited Funds, or
  • Your bank feed, depending on how it was recorded

Matching the Payment in the Bank Feed

When the deposit shows up in your bank feed:

1. Go to Banking → Transactions
2. Find the deposit
3. Match it to:
   • A single payment, or
   • Multiple payments combined (if using Undeposited Funds)
4. Confirm the match

This keeps your bank reconciliation clean and accurate.

Common Mistakes to Avoid

• Recording a bank deposit instead of receiving payment
• Leaving payments unapplied
• Posting deposits directly to income instead of Accounts Receivable
• Mixing Undeposited Funds and bank accounts inconsistently

These mistakes don’t usually cause problems right away — but they create confusion later, especially at tax time.

How to Fix a Mistake

If something doesn’t look right:

• Delete the incorrect payment or deposit
• Re-record the payment using one of the methods above
• Re-match the bank transaction if needed

If you’re unsure, it’s better to pause and ask for help than to keep layering fixes on top of a bad entry.

Final Tips for Staying Organized

• Always receive payments against the invoice
• Use Undeposited Funds consistently
• Review your Accounts Receivable Aging report monthly
• Don’t rely on bank deposits alone to track income

Need Help Cleaning This Up?

If your invoices show unpaid but your bank shows deposits — or if you’re seeing unapplied payments — it’s usually fixable.

If you’d like help reviewing or cleaning up how payments are being recorded in QuickBooks Online, feel free to contact me through my website. Catching issues early saves time, money, and frustration later.