Payment on account - What is payment on account?

Payment on account is any partial payment of an amount that is owed, either to you or by you, that’s not matched to a specific invoice.

Learn more about managing deposits with invoicing software.

If you receive a payment from a customer or send a payment to a supplier without making reference to a specific invoice, this can be treated as a payment on account. This includes both full and partial payments.

When payment on account occurs

Occasionally, payments are issued for amounts due but don’t come with a reference to a particular invoice or order, making it difficult to reconcile.

It’s common when credit is used for acquiring goods or services, and then payments are made over the course of time in varying amounts. Purchases made using credit can also be considered purchases on account.

How to handle payment on account

If you make a payment to a supplier that you can’t allocate at the time to invoices received, you can designate this as a "payment on account". Then at a later date, you can match it with the invoice/invoices it relates to, or partially match it against an invoice.

Payments made by your customers to your business can be treated in the same way.