One customer payment can settle a dozen open invoices at once, and QuickBooks Online handles it in a single screen called Receive Payment. You enter the total received, tick the invoices the payment clears, and the running balance falls to zero as you go. For a handful of invoices that's a minute's work, and your job is only to land the amount on exactly the right ones. The clean case is that simple, and most of the care goes on the messier remittance that turns up the rest of the time.
This is the receiving side of the desk. If you're looking for how to send a remittance to your own vendors, that's a different job, covered in how to send a remittance advice in QuickBooks Online. Here we're the supplier, and the money has just arrived.
Applying one payment across many invoices
When a customer pays you, the payment rarely matches a single invoice. They run their accounts payable, batch everything they owe you, and send one amount with a remittance listing the invoices it covers. Applying that payment to the right open invoices, so each one is marked paid for the correct amount, is called cash application, and in QuickBooks Online it all happens in the Receive Payment screen.
The clean case, step by step
Start with the simplest version, where the customer paid every invoice in full and the total matches.
- Open Receive Payment. Select + New, then Receive payment.
- Choose the customer. Pick the customer from the dropdown. QuickBooks Online lists all their open invoices in the Outstanding Transactions section.
- Enter the amount received. Type the total the customer paid into the Amount received field.
- Select the invoices. Check the box next to each invoice the payment covers. QuickBooks distributes the amount across the ones you tick, and the running total at the bottom should land on zero to apply.
- Set the deposit account. Use Deposit to, and choose the bank account the money landed in, or Undeposited Funds (shown in newer QuickBooks Online as Payments to deposit) if this payment will be part of a larger bank deposit. More on that below.
- Save. Select Save and close. Every selected invoice is now marked paid.
By default QuickBooks Online applies a payment to the oldest invoices first, so if you enter an amount without ticking specific invoices it works down from the top. When a remittance names exact invoices, tick those instead of relying on the order, so your books match the customer's advice line for line.
Customer paid multiple invoices with one check
Nothing about Receive Payment changes when the payment is a paper check. The check clears the bank as one amount, and the check stub that came with it is your remittance, one line per invoice with the amount applied to it, plus any deductions taken. (A stub is one of the four forms the same document takes, covered in payment advice, check remittance, ACH and EDI 820.) Work the stub through the steps above, choosing the customer, entering the check total and ticking the invoices the stub names, and if the check is being banked in a batch with others, receive it into Undeposited Funds so the eventual deposit still matches the bank line.
One check spanning several customer accounts, a property manager paying five or six locations at once, needs one Receive Payment per customer, because the screen works one customer at a time. Receive each customer's share into Undeposited Funds, then group the shares onto a single Bank Deposit for the check total, and the bank feed matches one line as it should.
At volume, checks add one step worth automating, because the stub is on paper. Teams that scan checks before depositing them already have everything they need, and RemitClear reads a scanned stub the same way it reads any other remittance, matches the invoices and prepares the Receive Payments per customer, including a stub that spans several accounts.
Short payments and deductions, when the amounts don't line up
Remittances are rarely clean, and the Payment column on the right of each invoice line is what lets you land less than the full balance on an invoice. Doing that correctly, and deciding what the shortfall is, is covered in how to apply a partial payment to an invoice in QuickBooks Online.
Credit memos and overpayments
A remittance that nets off a credit needs that credit applied to the invoices the advice names before the cash lands, and an overpayment does the reverse, leaving a surplus credit on the customer's account. The credit side, including the setting that applies credits for you and why it causes trouble, is covered in how to apply a credit memo to an invoice in QuickBooks Online.
Undeposited Funds and matching the bank deposit
One customer payment often reaches your bank inside a larger lump sum, so receiving each payment into Undeposited Funds and then grouping them onto a single Bank Deposit is what keeps your bank feed matchable. The full account, how to find the balance and how to clear it, is covered in how to clear undeposited funds in QuickBooks Online.
Unapplied cash
A payment recorded but never applied to specific invoices doesn't disappear, it sits as unapplied cash, overstating your receivables aging while QuickBooks reports it as Unapplied Cash Payment Income on a cash basis. Finding and clearing those is covered in how to apply an unapplied payment in QuickBooks Online.
Where volume breaks it
For a payment against two or three invoices, Receive Payment is a minute of work, and the trouble is volume and length. Consider a wholesale distributor paid every two weeks by a national grocery group. The remittance arrives as a spreadsheet running several pages and close to two hundred invoices, a couple knocked down for a short delivery, one reduced by a promotional rebate. Every one of those lines has to be found in Outstanding Transactions, ticked and amount-checked against the advice, with the deductions coded on the side, before the single deposit will reconcile, and that's most of an afternoon every two weeks of pure transcription.
Can you apply remittance advice to invoices automatically in QuickBooks Online?
QuickBooks Online can't do it on its own. Receive Payment is a manual screen, and there's no native setting that reads a remittance advice and applies the payment across the invoices it names, so the automation has to come from an app working on the receiving side.
RemitClear takes the remittance in whatever form your customer sent it, a PDF, a spreadsheet, a CSV or the body of an email, pulls out every invoice number and amount, looks each one up against the open invoices in your QuickBooks Online company, and holds the allocations until you approve them. Approve them and it writes one Receive Payment per customer, applied across every invoice that payment covers. Short payments, rebate deductions and credit memos come back to you for a decision instead of being guessed at, so a two-hundred-line document turns into a quick review instead of a box-ticking afternoon.
That's the job RemitClear's cash application for QuickBooks Online is built for. For the platform-agnostic view, see our overview of cash application automation software.
Which apps do this, and why most QuickBooks remittance apps don't
Search for a QuickBooks remittance app and nearly everything you find solves the opposite problem.
Remittance advice in QuickBooks Online means two different jobs depending on which side of the transaction you're on. On the accounts payable side, you're paying a supplier and sending them a document listing what you paid, and QuickBooks Bill Pay does this natively by attaching a remittance advice to the payment email, which is what most third-party apps with "remittance" in the name are built for. On the accounts receivable side, a customer has paid you one lump sum and sent you a remittance listing the invoices it covers, and you have to apply that money across your open invoices. Those are different products, an app that sends remittance advice to your vendors won't apply a customer payment to your invoices, and QuickBooks Online has no built-in automation for the receiving side, since Receive Payment is a manual screen.
So if you're a bookkeeper looking for the second thing, the category to search for is cash application or remittance matching, not remittance advice. A tool in that category reads the remittance your customer sent, whether it arrives as a PDF, a spreadsheet, a CSV or the body of an email, extracts every invoice number and amount, matches those against the open invoices in your client's QuickBooks Online file, and prepares the Receive Payment allocations for you to approve. The Receive Payment that lands in QuickBooks Online is the same one described here, and it's the transcription that disappears.
- Sending remittance advice to vendors (AP). QuickBooks Bill Pay natively, plus various add-ons, which isn't the side you're on here.
- Receiving and applying customer remittances (AR). Cash application and remittance matching tools, which is the job in this article.
- Batch deposits and bank feed matching. Handled inside QuickBooks Online with Undeposited Funds and Find Match, covered above. A cash application tool feeds this, so the deposit you record and the bank line you match it against agree.
For bookkeepers running several client files, the thing worth checking is whether a tool works across multiple QuickBooks Online companies from one login, because the volume problem is rarely in one client file, it's spread thinly across many. RemitClear does the receiving side for QuickBooks Online and is built for exactly that multi-file case.
Summary
The mistake that corrupts the books here is trusting the default. Enter an amount without ticking the invoices the remittance names, and QuickBooks applies it oldest-first, so your ledger and the customer's advice drift apart one line at a time. The second mistake is receiving the cash now and promising to apply it later, which parks the same work in unapplied cash for a future you with less context to work from. Tick the exact invoices the advice names, route everything through Undeposited Funds, and do it while the remittance is still in front of you, and once you're into a couple of hundred lines every two weeks it's worth having something read the advice for you.
