How To Pay Partial Bill In QuickBooks: A Step-By-Step Guide

Paying bills and invoices in full can be difficult, especially when cash flow is tight. Thankfully, QuickBooks allows users to make partial payments on bills and invoices to help manage cash flow.

In this comprehensive guide, we will walk through the steps on how to pay a partial bill in QuickBooks Desktop and QuickBooks Online. Whether you are a business owner, bookkeeper, or accountant, this guide will equip you with the knowledge to easily record partial payments in QuickBooks.

Overview of Partial Payments in QuickBooks

Before diving into the step-by-step instructions, let’s first go over some key points about partial payments in QuickBooks:

• Partial payments allow you to pay only a portion of a bill or invoice amount. The remaining balance stays open until you make another payment.

• When making a partial payment in QuickBooks, the original bill or invoice remains open with the remaining balance. You do not need to edit the original amount

• Partial payments can be made toward vendor bills, purchase orders, and customer invoices.

• The partial payment is recorded as a credit to offset the open bill or invoice

• You can pay multiple bills or invoices at once and designate partial payment amounts for each.

Recording Partial Bill Payments in QuickBooks Desktop

Follow these steps to pay a partial bill in QuickBooks Desktop:

1. Go to Vendors > Enter Bills. Any unpaid bills will be visible here.

2. Select the bill you want to partially pay.

3. Click Pay Selected Bills.

4. In the Set Credits section, enter the amount of the partial payment. Make sure the amount is less than the total bill amount.

5. You can change the payment date if needed.

6. Choose the correct payment account and payment method.

7. Click Pay Selected Bills.

8. QuickBooks will apply the partial credit to the vendor bill, leaving the balance open.

9. When you receive the next partial payment, repeat steps 1-7 to apply additional credits to the bill until it is fully paid.

That’s it! The existing bill remains open until fully paid off. QuickBooks tracks the partial payments applied as credits.

Recording Partial Invoice Payments in QuickBooks Desktop

Paying customer invoices partially in QuickBooks Desktop involves a similar process:

1. Go to Customers > Receive Payments. Any unpaid invoices will show here.

2. Select the invoice(s) you want to pay partially.

3. Enter the amount of the partial payment. Make sure it’s less than the total invoice amount.

4. Click Set Credits if you need to change the payment date or payment method/account.

5. Click Receive Payment.

6. QuickBooks applies the partial payment to the invoice, leaving the balance open.

7. When you receive additional payments for the open invoice, repeat steps 1-5 until it is fully paid.

And that’s all there is to it! QuickBooks will track the partial credits received and the open balance on the invoice.

Recording Partial Bill Payments in QuickBooks Online

Let’s go over how to pay bills partially in QuickBooks Online:

1. From the left menu, click Expenses > Bills.

2. Find the bill you want to partially pay and click the Action button.

3. Select Pay Bill.

4. In the Pay Bill window, enter the amount of the partial payment. Make sure it’s less than the total bill amount.

5. By default, the original bill date will be the payment date. Change this if needed.

6. Choose the correct payment account and payment method.

7. Click Pay Now.

8. QuickBooks Online applies the partial credit to the bill, leaving the balance open.

9. When you receive additional partial payments, repeat steps 2-7 until the bill is fully paid off.

It’s that simple! The bill stays open in QuickBooks Online for easy tracking of the remaining balance.

Recording Partial Invoice Payments in QuickBooks Online

Here are the steps to make a partial customer payment in QuickBooks Online:

1. From the left menu, click Sales > Invoices.

2. Select the invoice you want to partially pay.

3. Click the Action button and select Receive Payment.

4. In the Receive Payments window, enter the amount of the partial payment. Make sure it is less than the total invoice amount.

5. By default, the original invoice date will be the payment date. Change this if needed.

6. Choose the bank account and payment method.

7. Click Receive Payment.

8. The partial payment is applied to the invoice as a credit.

9. When you receive additional partial payments, repeat steps 2-7 until the invoice is fully paid off.

And that’s all there is to recording partial customer payments in QuickBooks Online! The invoice remains open with the balance due until fully paid.

Tips for Managing Partial Payments

Here are some tips and best practices when managing partial bill and invoice payments in QuickBooks:

• In QuickBooks Online, create custom payment terms to allow partial payments with due dates. This will help keep track of payments.

• Use the memo field to make notes about partial payments, such as “Partial payment 1 of 3”.

• Run Accounts Receivable and Accounts Payable aging reports frequently to identify overdue balances.

• Send payment reminders when partial payments become overdue.

• For invoices, resend the original invoice with the partial payment history.

• If a partial payment results in a zero balance due, change the invoice status to “Paid in Full” so you know it’s been fully paid.

• Review partial payments during reconciliations to match payments to bank deposits.

The Benefits of Partial Payments

Utilizing partial payments in QuickBooks provides a multitude of benefits for your business, including:

• Maintaining positive cash flow when you or customers are unable to pay the full amount at once

• Avoiding late fees and penalties

• Establishing consistent payment plans for customers

• Meeting vendor payment term discounts for early partial payments

• Reducing outstanding account balances

• Improving forecasting with expected partial payment schedules

By mastering partial payments in QuickBooks, you can optimize accounts receivable and payable, prevent late payments, and improve your cash flow management.

Frequently Asked Questions

Do partial payments reduce the original bill or invoice total?

No, partial payments do not reduce the original total. The bill or invoice amount stays the same. The partial payment reduces the amount owed.

Can I edit a bill or invoice after a partial payment?

Yes, you can still edit bills or invoices after applying partial credits. Make sure edits do not impact the payment history.

How do I track payment histories on partially paid invoices?

The payment history displays on the invoice in QuickBooks. You can also run Accounts Receivable aging reports to view payment status.

Can I apply one payment to multiple invoices?

Absolutely! When receiving payments, you can select multiple invoices and designate unique partial payment amounts per invoice.

What if a customer pays less than the partial payment amount due?

If the customer pays an amount different than the expected partial payment, simply enter the actual lower amount received as the payment. The remaining balance due will update.

The Takeaway

Recording partial payments in QuickBooks is easy and straightforward. By following the step-by-step instructions outlined here, you can keep your vendor bills and customer invoices organized when only partial payments are made.

Leveraging partial payments will keep cash flowing smoothly, maintain positive vendor relationships, and show customers you can accommodate flexible payment timelines.

So next time a vendor or client can’t pay the full amount due, rest assured you can handle partial payments in QuickBooks with just a few quick clicks. Both you and your customers will benefit!