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Customer payment not applied to the invoice

A customer paid, but the invoice still shows open in A/R aging. Or the customer has an unapplied payment or credit balance and the open invoice is still there.

QuickBooks Online: + Create, then Receive payment. Desktop for Windows: Customers, then Receive Payments; to change automatic application, Edit, then Preferences, then Payments, then Company Preferences. Labels differ on Mac and in older versions.

Likely causes

• The bank deposit was recorded as income (or added from the bank feed) instead of using Receive payment against the invoice.
• Receive payment was recorded, but the invoice was not checked in the Outstanding transactions list, leaving the money as an unapplied credit.
• A credit memo or overpayment exists but was never applied to the open invoice.
• In QuickBooks Desktop, the preference to automatically apply payments posted the money to the oldest invoice instead of the one the customer intended.

Quick fixes

1. Open the customer's record and review their open invoices, payments, and credits side by side. Note the exact amount and date of the payment you expected.
2. In QuickBooks Online, use + Create, then Receive payment. Pick the customer, check the invoice in Outstanding transactions, and — if you already have an unapplied payment or credit memo — check it in the Credits section so it pays the invoice without entering a new amount received. Record and close.
3. If the money was entered as a deposit to income instead, Intuit's Desktop guidance is to change the deposit so it posts to the customer and Accounts Receivable, then apply that credit with Receive Payments. In Online, the cleaner fix is often to undo or edit the deposit and record Receive payment instead. Check with your accountant if the deposit is in a closed period.
4. If a Desktop payment went to the wrong invoice, open the payment from the invoice's transaction history, uncheck the wrong invoice, check the correct one, and save. Consider turning off automatic application if your customers often pay specific invoices.
5. On the bank feed, match the downloaded deposit to the payment or Bank deposit — do not add it again. Then run A/R aging to confirm the invoice is closed.

A few more questions

Why does the customer show a credit and an open invoice at the same time?

The payment or credit memo was recorded but never linked to the invoice. Apply it through Receive payment (Online) or Receive Payments with Discounts and Credits (Desktop).

Should I just delete the open invoice?

No. Deleting hides the problem and breaks the customer history. Apply the payment or credit so both sides close properly.