QuickBooks Online Settings for Applying Payments

When working with payments in QuickBooks Online, it's essential to understand the settings that govern how these transactions are applied. In this article, we'll explore the key settings that can impact the way payments are applied to invoices.

One common scenario is when a customer makes multiple payments towards an outstanding balance. However, if the 'Automatically Apply Credits' setting is not enabled, these transactions will not be automatically applied to each other. This means that the invoice will still show a balance despite the fact that two payments have been made.

To illustrate this, let's consider an example. Amy's Bird Sanctuary has an outstanding balance of $239. After making two separate payments, the customer's balance due is now $139. If we navigate to the Customer Balance Report (which can be accessed by clicking on the gear icon and selecting Account and Settings), we'll see that the 'Automatically Apply Credits' setting is currently toggled to the On position for our sample company.

It's crucial to understand how this setting affects accounting transactions, as it can have significant consequences. Some users may prefer this feature while others may not. By exploring the Company Settings (found by clicking on the gear icon and selecting Account and Settings), we can discover a range of options that impact payment application.

In conclusion, the 'Automatically Apply Credits' setting is just one of many settings in QuickBooks Online that can influence how payments are applied to invoices. It's essential to understand these settings to make informed decisions about your accounting transactions and avoid any potential issues.

Quickbooks online settings for applying payments