How To Mark Invoices Paid In QuickBooks Desktop

QuickBooks Desktop is one of the most widely used accounting software solutions for small to mid-sized businesses. One of the key tasks within QuickBooks Desktop is managing invoices and marking them as paid when you receive payments. This ensures your records are up-to-date, and your accounts reflect the correct outstanding balances.  This article will show you how to mark invoices paid in QuickBooks Desktop.

1. Open QuickBooks Desktop

1. Launch QuickBooks Desktop on your computer by double-clicking the QuickBooks Desktop icon.
2. Once QuickBooks is open, select the company file you wish to work on, then click Open.

2. Navigate to the Customer Center

To mark an invoice as paid, you’ll need to go to the Customer Center, where you can see all customer transactions including unpaid invoices.

1. In the top menu bar, click on Customers.
2. From the dropdown, select Customer Center. Alternatively, you can press Ctrl + Shift + C as a shortcut.

This will open the Customer Center window.

3. Locate the Invoice to Mark as Paid

Once you’re in the Customer Center, you need to find the specific invoice you want to mark as paid:

1. In the Customer Center, go to the Transactions tab. Here you can see a list of transactions for the selected customer.
2. Find the Invoices section (you might need to filter by Invoices).
3. Look for the invoice you want to mark as paid. You can search by:
   • Invoice number
   • Customer name
   • Amount due
4. Double-click the invoice to open it. You will see the details of the invoice, including the amount due, date, and customer details.

4. Open the “Receive Payments” Window

QuickBooks Desktop allows you to record a payment against an invoice using the Receive Payments feature. Here’s how you can open it:

1. With the invoice open, look at the top-left corner of the invoice window.
2. Select Receive Payment. This button is typically located next to the Create Credit Memo/Refund button.

Alternatively, you can go to the Customers menu in the main window, and choose Receive Payments directly.

5. Enter Payment Details

In the Receive Payment window, you will need to enter specific payment details:

1. Customer: Ensure the correct customer is selected in the Customer field. QuickBooks will automatically populate this field if you opened the invoice from the Customer Center.
2. Payment Amount: The Amount field should automatically fill in with the total outstanding amount of the invoice. If the customer paid a partial amount, adjust the payment amount accordingly.
3. Payment Method: Select the payment method used by the customer from the Payment Method dropdown. Common options include:
   • Cash
   • Check
   • Credit Card
   • Bank Transfer
   • Other Payment Methods (if applicable)
4. Reference Number: If the payment was made via check, bank transfer, or another traceable method, you can add a reference number (e.g., check number or bank transaction number).
5. Deposit To: Choose the bank account where the payment was deposited. If you’re unsure, it will typically be the account you’re currently using for deposits, such as your Checking Account.
6. Payment Date: Verify the payment date in the Payment Date field. If necessary, you can edit it.

6. Apply Payment to Invoice

After entering the payment details:

1. In the Apply to Invoice section, QuickBooks will list any outstanding invoices for that customer. You should see the invoice you’re marking as paid.
2. Ensure the payment is applied to the correct invoice. If the customer has multiple open invoices, you can select or deselect individual invoices by checking or unchecking the box next to each invoice.

• If it’s a full payment, QuickBooks will automatically apply the payment to the full amount of the invoice.
• If it’s a partial payment, manually adjust the amount in the Payment Amount column, and QuickBooks will apply the payment accordingly.

3. The Outstanding Balance will automatically update to show how much of the invoice is still unpaid after the payment has been applied.

7. Save the Payment

Once the payment details are correctly entered and the payment has been applied to the invoice:

1. Click the Save & Close button at the bottom of the Receive Payment window to record the payment and close the window.

• If you want to keep the window open to enter another payment, click Save & New.

8. Verify Payment Has Been Recorded

After saving the payment, you should return to the Invoice window to verify that the invoice status has been updated.

1. Go back to the Customer Center and locate the customer’s invoice again.
2. The Status field should now reflect Paid or Closed if the full payment has been received. If it was a partial payment, the status will show Partially Paid with the remaining balance.

You can also check the Payment History section to verify that the payment was applied correctly.

9. Generate a Payment Receipt (Optional)

You may want to send a receipt to your customer confirming the payment:

1. In the Receive Payment window, click Print in the bottom-left corner.
2. Choose Payment Receipt from the print options.
3. You can then email or print the payment receipt and send it to your customer.

10. Reconcile the Payment with Your Bank Account (Optional)

If you are using QuickBooks Desktop to reconcile your bank transactions:

1. Go to the Banking menu and select Reconcile.
2. Choose the bank account where the payment was deposited.
3. QuickBooks will show you a list of payments that have been recorded. Ensure the payment you just entered is reflected in the bank reconciliation.
4. Follow the steps to complete your bank reconciliation.

Marking an invoice as paid in QuickBooks Desktop is a relatively straightforward process that involves using the Receive Payment feature. This process ensures that your accounts are always up-to-date, and payments are properly applied to your invoices. By following the steps above, you can efficiently manage customer payments, track outstanding balances, and maintain accurate financial records.

If you encounter any issues while marking invoices as paid, ensure that you are using the latest version of QuickBooks Desktop and consider reviewing your customer and payment records for any discrepancies.