# Introduction - Customer Payments

Every payment a customer makes is recorded here, whether it settles one invoice, several, or none at all.

**Video coming soon:** Recording a payment, and allocating it across open invoices.

A payment and an allocation are two separate things, and understanding the difference makes almost every awkward receipts question straightforward.

![The Customer Payments screen. A table lists payments with columns for Date, Payment number, Reference Number, Customer, Invoice Number, Payment Mode, Amount, Payment Type and Unused. Payment modes read CHAPS, Bank Transfer, Cheque and BACS.](https://www.sorviai.com/help/customer-payments/customer-payment-list.png)

*Unused is the part of a payment not yet allocated to an invoice.*

## Receiving money is not the same as settling an invoice

A payment records that money arrived. An allocation decides which invoices it settles. Usually both happen in one action, but they come apart the moment a customer pays a round number that does not match any single invoice.

- **Payment** (the money): The amount, the date and how it was received. This is what hits your bank balance.
- **Allocation** (the matching): How that amount is split across open invoices. Editable after the fact without touching the payment itself.
- **Unapplied amount** (the remainder): Money received that has not been matched to anything yet. It sits as credit on the customer.

> **Note:**
>
> **This is why an invoice can look unpaid**
>
> The payment exists, your cash is right, and the invoice still shows a balance. That is an allocation problem, not a missing payment, and it is the single most common support question in this module.

## Money in your favour, three ways

A customer can have three different kinds of balance sitting with you. They look similar on the overview and mean different things, and only one of them is a payment.

| What it is | Where it came from | On your books |
| --- | --- | --- |
| Unapplied payment | They sent money not matched to an invoice. | Reduces receivables when applied. |
| Credit note | You reversed value on an invoice. | Reduces revenue when raised. |
| Advance held | They paid before you delivered. | A liability until applied. |

All three can settle an invoice. Which one you should use is decided by what actually happened, not by which is nearest to hand.

## Where payments come from

- **From an invoice**, which fills the allocation in for you. The common case.
- **From the module**, when one payment covers several invoices or none.
- **From the portal**, if customers can pay online. Recorded and allocated automatically.
- **Imported**, from a bank statement, then allocated by hand.