How can you apply a payment to a customer's invoice in QuickBooks?

The correct approach to apply a payment to a customer's invoice in QuickBooks is by using the Receive Payments feature. This feature is specifically designed for recording payments from customers against their outstanding invoices.

When you access the Receive Payments screen, you can select the customer whose payment you are processing, view their outstanding invoices, and choose the specific invoice(s) you want to apply the payment to. This ensures that the payment is accurately recorded against the right invoice, reflecting the customer's balance correctly.

Using the sales receipt is not suitable for applying payments to existing invoices, as sales receipts are meant for transactions where payment is received at the time of the sale rather than for outstanding invoices. Similarly, entering a payment directly into the invoice section would not properly reflect the payment application in the customer’s account. Therefore, utilizing the Receive Payments feature ensures that everything is accurately tracked in your financial records.