How to Apply an Interest-Only Payment to a Fully Paid Invoice

Summary

To apply an interest-only payment to an invoice that has already been paid in full, you must enable a specific setting in the Receipt Properties and set the deposit mode to handle interest payments.

Step-by-Step Guide

1. Navigate to Receipt Properties.

2. Ensure the checkbox for “Allow entry for Paid in Full Invoices” is enabled.

3. From the “Deposit Mode” dropdown menu, select “Interest Payment”.

4. Enter the value of the payment received in the “Payment” field.

5. Post the receipt. The General Ledger will be updated accordingly, affecting the Bank and Interest accounts.

Note: If you are applying a payment only to the interest portion of an invoice that still has an outstanding principal balance, you should ensure the “Allow entry for Paid in Full” checkbox is disabled.