How to mark an invoice as paid

This article explains how to record a payment in FreeAgent from your customer who pays off a single invoice.

To mark more than one invoice as paid with a single payment, find out how to mark multiple invoices as paid with one payment.

If you’ve enabled a bank feed or upload your bank transactions from a bank statement, you’ll need to explain the imported transaction as a payment for the invoice.

If you don’t have a bank feed enabled or upload your bank transactions, you can add a payment for the invoice manually.

You’ll need level 6 access or above to your FreeAgent account to follow the steps below. You can either explain an imported bank transaction, add a payment manually from the invoice or add a manual bank transaction.

If you don’t need to create an invoice, you can explain the cash coming in to the bank as Sales.

Explain an imported bank transaction

Once the relevant bank transaction has been imported into your FreeAgent account via a bank feed or uploaded from a bank statement, you can explain it as a payment for the invoice.

To do this, navigate to the ‘Banking’ tab at the top of the screen, select ‘Bank Accounts’ from the drop-down menu and choose the relevant bank account from the list of accounts.

Select the transaction that relates to the payment for the invoice and select ‘Invoice Receipt’ from the ‘Type’ drop-down menu.

FreeAgent will try to choose the appropriate invoice based on the outstanding amount. If FreeAgent has selected the wrong invoice, choose the correct invoice from the ‘Invoice’ drop-down menu.

Select ‘Explain Transaction’ to complete the process and the invoice will be marked as paid.

Add a payment manually

If you don’t have a bank feed enabled or upload your bank transactions, you can either add a manual payment from the invoice or from the relevant bank account.

Please note that if the payment for the invoice has been imported into FreeAgent, you’ll need to explain the transaction instead of following the steps below.

Adding a payment from the invoice

Once you've sent the invoice by email or marked it as sent, select ‘Add manual bank transaction’ from the 'Actions' drop-down menu.

Please note that this will add a manual bank transaction automatically in the bank account displayed on the invoice. If the payment was received into a different bank account, you’ll need to enter the bank transaction manually in that account instead.

Enter the appropriate date and amount for the payment and select ‘Create and Finish’ to mark the invoice as paid.

Adding a manual payment from the relevant bank account

If the payment was made into a different bank account than the one displayed on the invoice, you'll need to enter a manual bank transaction in the appropriate bank account.

Navigate to the relevant bank account and select ‘Add Transaction’ from the 'More' drop-down menu.

Select 'Invoice Receipt' from the 'Type' drop-down menu, enter the relevant date and amount for the payment and select the appropriate invoice from the ‘Invoice’ drop-down menu.

Select ‘Create and Finish’ to complete the process and the invoice will be marked as paid.