Payment entries move money between accounts and settle open invoices. They are the primary way to record customers paying you and you paying suppliers.
Open Accounting → Payment Entries.
Payment types
| Type | Use when |
|---|---|
| Receive | Customer pays you (money into bank, reduces AR) |
| Pay | You pay a supplier (money out of bank, reduces AP) |
| Transfer | Move money between your own accounts (e.g. cash to bank) |
Statuses
| Status | Meaning |
|---|---|
| Draft | Not posted; can edit |
| Submitted | Posted to GL and payment ledger |
| Cancelled | Reversed |
Creating a payment
- 1
Go to Accounting → Payment Entries and create a new payment.
- 2
Choose type (receive, pay, or transfer), payment number, date, and amount.
- 3
Select paid from and paid to accounts (leaf accounts only - typically bank, cash, AR, or AP).
- 4
For receive/pay, optionally select a party (customer or supplier).
- 5
Allocate against open invoices if this payment settles specific bills.
- 6
Save as draft, then Submit when correct.
How accounts work by type
| Type | Typical posting |
|---|---|
| Receive | Debit bank (paid to), credit AR (paid from) |
| Pay | Debit AP (paid from), credit bank (paid to) |
| Transfer | Debit destination, credit source |
The form shows hints for each type when you select accounts.
Allocating to invoices
- One payment can settle multiple invoices
- Partial payments are supported - allocate only the amount received
- Unallocated remainder stays on the party as advance/overpayment on the payment ledger
- Only non-draft, non-cancelled invoices appear for allocation
When allocated, invoice outstanding decreases. Status becomes partially paid or paid when outstanding reaches zero.
Cancelling
Only submitted payments can be cancelled. Cancellation reverses GL and payment ledger entries and restores invoice paid/outstanding amounts.
Submitted payments
You cannot delete a submitted payment - cancel it instead. Ask finance if you need to reverse a posted payment.