This guide explains how to record customer payments, handle partial payments, apply early-payment discounts, manage overpayments, and understand how PAX posts the related accounting entries.

1. Recording a Customer Payment

Step 1 - Open the Payments Module

From the dashboard, go to Sales → Payments.

Click any invoice row to expand it and view:

Line items
Tax amounts
Shipping charges
Current payment status

Step 2 - Log the Payment

Click Log Payment.

PAX will assume the customer is paying in full. However, you can change the payment amount if they are paying partially.

You may also:

Adjust the payment date
Select the payment method (e.g., check, ACH, credit card)
Enter reference details such as a check number
Add a manual discount
Apply a customer credit balance (if applicable)

Click Record Payment to finalize.

Step 3 - Status Updates

After recording the payment:

Paid in full invoices show a status of Paid
Partial payments show a status of Partially Paid
Unpaid invoices show a status of Open

If a partial payment is logged, PAX will display:

Amount previously paid
Current balance
Suggested remaining payment amount (editable)

2. Understanding the Accounting Entries

When a payment is recorded on a net terms invoice:

Accounts Receivable decreases
Cash in Bank increases

For prepaid customers (who pay before shipment):

Accounts Receivable is not used
Payments increase the Customer Liabilities account
Once the order ships, the liability is reduced and revenue is recognized

3. Handling Partial Payments

To record a partial payment:

Enter an amount less than the invoice total
Record the payment
The invoice will show Partially Paid

When the customer pays the remaining balance:

Open the same invoice
Click Log Payment again
PAX will show the remaining balance
Adjust if needed and record the final payment

4. Handling Overpayments and Credit Balances

If a customer pays more than they owe:

First apply payment to the invoice total
Then log a second payment without selecting an invoice for the excess amount

This creates a credit balance on the customer's account.

You can view this in the Customer Card, which shows:

Total credit balance
How much has been applied
Remaining unapplied credit

To apply the credit to a future invoice:

Open the Payments module
Select an open invoice
PAX will detect the credit balance
Check Apply Credit
Record the payment

The invoice will show as partially paid if the credit does not cover the full amount.

5. Frequently Asked Questions

1. What happens if a customer pays early and qualifies for an early-payment discount?

If the customer's payment terms include an early-payment discount (such as "2% 10, Net 30"), PAX automatically detects:

Whether the payment is within the discount window
The discounted amount the customer is allowed to pay

When you enter the discounted payment amount, PAX automatically applies the discount to the Sales Discounts (contra-revenue) account. The invoice and journal entries will reflect the discount taken.

2. Can I apply one payment to multiple invoices at once?

Not yet. Currently, payments must be applied one invoice at a time.

A future PAX update will support lump-sum payments that cover multiple outstanding invoices.

3. What if a customer pays more than they owe?

Overpayments create a credit balance on the customer's account. See section 4 above for details on handling overpayments and credit balances.

4. How do I apply a customer's credit balance to an invoice?

Customer credits can be applied when logging a payment on an invoice. See section 4 above for step-by-step instructions.

How to Receive Customer Payments