Invoice Payment Linking

Invoice payment linking connects bank deposits to open invoices, which covers wires, checks, processor payouts, and manual payments that do not match on their own. Split one deposit across invoices; the invoice status moves to Partially Paid or Paid (Manual) automatically.

Key capabilities

• Link as Payment from a transaction's detail drawer: pick a bill or invoice and the amount to apply
• Record Payment on the invoice, with a transaction picker that puts the best candidate deposits first under "Recommended"
• Suggested matches appear right on the Transactions list, where you can apply or dismiss them
• Split payments: one deposit applied across several invoices
• Partial payments: several deposits applied to one invoice over time
• Each payment records an amount, a currency, and a payment date that can differ from the deposit's date
• Automatic status changes: open, then partially paid, then paid
• Two safeguards: you cannot apply more than the invoice still owes, or more than the deposit has left
• A deposit's remaining balance counts both invoice payments and bill payments
• The payment is booked on the deposit's own journal entry, against the customer's receivable, so no second entry is created
• A Processing fee withheld field closes an invoice paid by a deposit that arrived net of a Stripe, Square or PayPal fee
• Edit, Move (to another invoice), or Unlink a payment from the invoice's Payments section
• Fully paying an invoice that was issued through Stripe tells Stripe it was paid outside Stripe
• Cash Receipts tab: weekly deposits received, applied, and unapplied, with dismiss and restore

How it works

You start from either side, a bank deposit or an invoice, and apply an amount. DayZero checks that the deposit has enough left and that the invoice still owes that much, records the payment, updates what has been paid on the invoice, and sets its status.

flowchart TD
  start{"Start from"} -->|"Deposit"| link["Link as Payment"]
  start -->|"Invoice"| rec["Record Payment"]
  link --> alloc["Choose amount to apply"]
  rec --> alloc
  alloc --> check{"Within what the deposit has left and the invoice owes?"}
  check -->|"No"| block["Blocked"]
  check -->|"Yes"| pay["Payment recorded against the customer's receivable"]
  pay --> status["Open, Partially Paid, then Paid"]

How to use it

1. From Transactions: open a deposit and click Link as Payment. Choose the Invoices tab, select the invoice, and enter the amount.
2. From Invoices: open an invoice and click Record Payment. The picker lists candidate deposits, with likely matches under Recommended.
3. Select a deposit. The amount fills in with the smaller of the invoice's balance and what the deposit has left; lower it for a partial payment.
4. If a processor kept a fee, enter it under Processing fee withheld (see below).
5. Optionally set a Payment Date to override the deposit's date, then click Add Payment.
6. For a split payment, link the same deposit to several invoices, entering a different amount each time.
7. To fix a mistake, open the invoice and use Move, the pencil (edit), or the unlink icon on the payment.
8. Use the Cash Receipts tab on the Invoices page to review weekly deposits and apply the unapplied ones.

Pro tips

• Let the Recommended group do the work. Likely deposits are ranked first by amount, invoice number in the memo, date, and customer name.
• For a check that covers several invoices, apply it to each invoice in turn; the picker shows the deposit's shrinking remaining amount.
• Set the Payment Date when the money cleared on a different day than the deposit shows; reporting uses the payment date.
• Applied amounts include bill payments, so a deposit you partly applied to a bill shows the correct remainder here.
• Use Cash Receipts when a client deposits several checks at once: see the week's received, applied, and unapplied totals and clear the unapplied list in one pass.
• Dismiss Cash Receipts rows that are not customer deposits so the list shows only real work; use Undo or restore if you change your mind.

In-depth guide

The payment record

Each link is a payment record that ties one invoice to one bank deposit and carries an amount, a currency (USD by default), and a payment date. Because the amount is an allocation rather than the whole deposit, one deposit can pay several invoices and one invoice can be paid by several deposits.

Match suggestions

DayZero scores deposit and invoice pairs on amount, an invoice number in the memo, how close the deposit date is to the due date, and how well the payer's name matches the customer, including near-miss spellings. Strong matches show as suggestions you accept or dismiss, and when one deposit looks like it paid several invoices for the same customer it suggests the split. Nothing is linked from a suggestion until you accept it. Developers can also run matching over the API; see the Invoices API guide.

Checks before a payment is recorded

• The invoice is still open, partially paid, or already marked paid manually.
• The amount does not exceed what the deposit has left after invoice and bill payments.
• The amount does not exceed what the invoice still owes (after any credits).
• Recording the same deposit against the same invoice twice returns the existing payment.

Status and accounting

After a payment posts, the total paid is compared with the invoice total: at or above it the invoice becomes Paid (Manual), below it Partially Paid. Invoices paid through Stripe itself show Paid (Stripe).

The payment is added to the deposit's existing journal entry. The invoice gets its own credit to Accounts Receivable, using the customer's own receivable account when one exists, and it is taken out of the deposit's unapplied credit. One deposit paying several invoices keeps a single entry with a receivable line per customer. Unlinking removes only that invoice's line.

Processing fees

Stripe, Square and PayPal pay out the sale less their fee, so the deposit is smaller than the invoice. Enter the fee under Processing fee withheld. The invoice is credited the payment plus the fee, and the fee is debited to Merchant Fees Expense on the deposit's same journal entry. A $2,183.20 deposit therefore closes a $2,220.00 invoice with a $36.80 fee. You can enter the amount as the cash received or as the full invoice amount; DayZero works out the fee either way.

The deposit must already be booked (categorized) so the fee has an entry to go on; otherwise you are asked to categorize it first. When the deposit's description names a processor and the shortfall is fee-sized (up to about 10% of the invoice plus $1), the fee is filled in for you. If an invoice is left Partially Paid by exactly such a gap, the invoice shows a Close with $X fee button (with the gap filled in) that adds the fee afterward. A payout's journal entry is renamed to list the customer, the invoices, and the gross and fee amounts, unless someone wrote its description.

Cash Receipts reconciliation

The tab covers the last 12 weeks and shows Total Received, Applied, Unapplied, and the percent reconciled. Expand a week to see each deposit and what it paid. Unapplied Deposits lists deposits with a remaining balance; use Record Payment on a row to apply it, or dismiss it if it is not a customer deposit.