One payment, several invoices: allocate the amount and prove the remainder

Establish the invoice set

A customer has three unpaid invoices:

The following scenarios are alternatives. Each starts with these three invoices fully open.

A payment from a different party needs additional evidence of the relationship. Similar amounts do not justify allocating one customer’s money to another customer’s debt.

Allocate an €800 payment

The remittance advice names R-41 and R-42. Their amounts add up exactly:

€420 + €380 = €800.

After allocation, R-41 and R-42 are closed. R-43 remains €450 open. There is no unused payment amount.

This produces two distinct checks:

• Payment: €800 received − €800 allocated = €0 unallocated.
• Invoices: €1,250 original balance − €800 applied = €450 open.

The €450 is an unpaid invoice, not a difference in the bank payment.

Handle a partial payment of €600

Now suppose the advice directs €420 to R-41 and €180 to R-42.

R-42 must retain its €200 remainder. Marking it fully paid would understate receivables. The payment is nevertheless fully allocated: all €600 has a documented destination.

If the customer gives no allocation, follow the applicable contractual and legal allocation basis and obtain clarification where needed. “Oldest first” should not silently override an explicit, valid payment instruction.

Keep an overpayment visible

A payment of €1,650 explicitly covers all three invoices. Allocate €1,250; €400 remains.

All invoices are now settled. The customer account contains a €400 credit. That amount may later be refunded or applied to another invoice with the appropriate basis. It must not become extra revenue merely to make the payment appear finished.

The two checks now read:

€1,650 − €1,250 = €400 unallocated credit.

€1,250 − €1,250 = €0 outstanding invoices.

Preserve both results. A screen showing only “three invoices paid” would hide the remaining obligation to the customer.

Distinguish a discount from an unexplained short payment

If a documented 2% discount applies to all €1,250 and the payment meets its conditions, the customer pays €1,225 and the discount is €25. Settlement consists of €1,225 cash plus the properly recorded €25 reduction.

The discount’s net and VAT components follow the underlying invoices. Different tax treatments require an appropriate split. If the conditions are not met, the €25 does not automatically qualify as a discount; it remains an amount to clarify.

See invoice reductions and refunds for the connection between correction and settlement.

Verify the allocation after saving

Check the actual bank movement, the invoices selected, amounts assigned, remaining open items and any credit. Confirm that the same bank movement was used only once.

Hans supports payment matching, partial and batch settlements, and configured treatment of supported differences. The bank agent can investigate references and related evidence. For review, the essential proof is still the allocation and its resulting balances.

Use open-item reconciliation to connect these individual results to the customer or supplier account at month end.