Record a Partial Payment on an Invoice in QuickBooks

To record a partial payment in QuickBooks, open Receive Payment, select the invoice, and enter the amount the customer actually paid instead of the full total. QuickBooks applies that amount, leaves the balance open, and keeps the invoice as partially paid until the rest comes in. An upfront deposit before you invoice is recorded a little differently, as a credit or a retainer you apply later. This guide covers partial payments, upfront deposits and retainers, keeping the balance due visible, and matching each payment to your bank statement in QuickBooks Online and Desktop.

Every partial payment eventually hits your bank account, and the invoice only closes cleanly when that deposit is in your books to match against. If customer payments are missing because they cleared on a statement that never imported, convert your PDF bank statement to QuickBooks with the tool at the top of this page so every deposit is recorded and ready to match to the right invoice.

How do I record a partial payment on an invoice in QuickBooks?

Record a partial payment by receiving payment against the invoice for less than the full amount. In QuickBooks Online, click New, Receive payment, choose the customer and the open invoice, then type the actual amount received in the Payment column rather than accepting the full balance. In Desktop, use Customers, Receive Payments and enter the smaller amount. QuickBooks applies what you entered, marks the invoice partially paid, and leaves the unpaid balance open so it still shows on your accounts receivable and on the customer's next statement.

How do I record a customer deposit before I send the invoice?

Record an upfront deposit as a credit to the customer that you apply to the invoice later. The cleanest way in QuickBooks Online is to receive the payment and let it sit as an unapplied credit on the customer, or use a retainer liability account if the deposit is money you have not yet earned. When you finish the work and create the invoice, apply the existing credit so only the remaining balance is due. In Desktop you can record the payment and leave the credit on the customer, then apply it when you invoice. Handling it this way keeps you from recording income before you have delivered.

Should a deposit be income or a liability?

A deposit is a liability until you have earned it, then it becomes income, which our guide to recording a customer prepayment or retainer covers in full. If a customer pays ahead for work you have not started, that money is technically owed back until you deliver, so recording it to a customer deposit or retainer liability account is the accurate treatment. Once you complete the work and invoice it, you move the deposit from the liability account to income by applying it to the invoice. For a simple deposit that you invoice within the same short period, many small businesses just apply it as a credit, which nets to the same place by the time the job is billed.

How do I keep track of the remaining balance due?

Keep track of the balance due by leaving the invoice open after a partial payment and reviewing your accounts receivable aging. QuickBooks automatically shows the invoice as partially paid with the remaining amount still outstanding, and the open balance appears on the Accounts Receivable Aging report and on the customer's statement. Send a statement or a reminder for the unpaid portion so it does not get forgotten. Chasing down the rest of what a client owes is easier when the open balance is accurate, and a dedicated system for following up on unpaid invoices can help if slow payers are a recurring problem.

How do I match a partial payment to my bank statement?

Match a partial payment by tying the deposit on your bank statement to the payment you received in QuickBooks. When the customer's payment clears, it appears as a deposit in your bank feed or on your imported statement. In QuickBooks Online you match that deposit to the Receive Payment you already recorded so it is not double-counted; in Desktop you clear it during reconciliation. If several partial payments were deposited together as one lump sum, group them so the total matches the single deposit that hit your bank. Converting your statement first ensures every one of those deposits is present to match. If you are on QuickBooks Online, convert the PDF statement to QuickBooks Online and the deposits arrive in the For Review tab ready to match.

What if a customer overpays an invoice?

If a customer overpays, QuickBooks records the extra as a credit on their account that you can apply to a future invoice or refund. When you receive more than the invoice total, the surplus becomes an available credit for that customer. You can leave it to offset their next invoice, or issue a refund if they want the money back. Either way the overpayment is tracked against the customer, so it does not distort your income or leave an unexplained amount sitting in your bank account.

Why does my invoice still show the full amount after a partial payment?

Because the payment was saved without the amount being reduced. In QuickBooks Online the Receive Payment screen defaults the Amount received field to the full invoice total, and if you tick the invoice without editing that figure, QuickBooks records a payment in full. Set Amount received to what the customer actually sent first, then tick the invoice, then save.

If it is already saved wrong, open the payment from the customer's transaction list, change the amount, and save again. The invoice reverts to partly paid and the balance reappears in your accounts receivable ageing. Nothing needs to be deleted.

How do I record a partial payment in QuickBooks Desktop?

Go to Customers, then Receive Payments. Choose the customer, enter the amount actually received in the Amount field, and tick the invoice it belongs to. QuickBooks then asks how to treat the shortfall, offering Leave this as an underpayment or Write off the extra amount. Choose the underpayment option to keep the balance open.

One quirk catches people out. That dialog only appears when there are no other open invoices for the customer to apply the difference against. If the customer has several outstanding invoices, untick them all, then re-tick only the invoice being paid, and the prompt appears as expected.

Can I apply one payment to multiple invoices in QuickBooks?

Yes. On the Receive Payment screen, enter the total amount received and tick every invoice the payment covers. QuickBooks distributes it across them, filling the earliest invoices first and leaving the remainder open on the last one. You can override the split by typing an amount into the Payment column on each invoice line.

Watch the automatic behaviour. QuickBooks Online applies credits and payments oldest first by default, which is usually right and occasionally wrong, such as when a customer explicitly pays the newest invoice and leaves an older disputed one open. Check the split before saving rather than after.

What is the difference between a partial payment and progress invoicing?

A partial payment is one invoice for the full amount that the customer pays in instalments, so the invoice sits partly paid until it clears. Progress invoicing issues several smaller invoices against an estimate as work is completed, so each invoice is a separate document billed and paid in full.

The distinction matters for revenue timing and for what the customer sees. A partly paid invoice keeps the whole amount in accounts receivable from day one. Progress invoicing only recognizes what has been billed so far, which is normally what construction and project work wants. If you bill in stages against an estimate, our guide to progress invoicing in QuickBooks covers the setup.

Why is my partial payment sitting in Undeposited Funds?

Because Receive Payment defaults to depositing into Undeposited Funds, which is a holding account rather than a real bank account. The payment is recorded and the invoice balance is correct, but the money has not been told which bank deposit it belongs to yet, so it will not appear in the bank register or match a bank feed line.

Group it into a deposit that matches what the bank actually shows. Go to New, then Bank deposit, tick the payments that landed together on the same day, and save. This matters most for card and merchant payments, where the bank shows one lump sum covering several customer payments, and the deposit has to be grouped the same way for the bank feed to match it. If a deposit was grouped wrongly, you can edit or delete the deposit without touching the payments inside it.

Partial payment scenarios at a glance

Get every customer payment into QuickBooks

Partial payments, deposits, and overpayments all reconcile only when each deposit is in your books. If you are catching up or your bank feed missed activity, convert the PDF statements that show those customer payments so every deposit is recorded, then apply each to the right invoice and clear the open balances. For related steps, see how to review imported bank transactions and how to handle a customer refund when an overpayment needs to go back.