Customer A has an Unapplied Payment Amount of $100 that has already been deposited to checking account, Customer B has an Invoice of $100. How to apply the unapplied amount from Customer A to pay for Customer B's Invoice.
Step 1. Create a Journal Entry that take money out of one Customer A's balance
1. Navigate to Transactions > Financial > Make Journal Entries:
Dr. Account receivable $100
Cr. Checking $100
and selected "Customer A" in the Name column for both Lines since we want to take money out of the Customer's balance.
2. On the same Journal Entry,
Dr. Checking $100
Cr. Account receivable $100
and selected "Customer B" in the Name column for both Lines since we want to use this Journal Entry to pay for the Invoice.
Step 2. Pay Customer B's Invoice
1. Navigate to the Invoice, click "Accept Payment"
2.a. Under the Apply tab > Invoice subtab > Select the Invoice
2.b Under the Apply tab > Credits subtab > Select the Journal Entry
3. Click Save
The status of the Invoice for Customer B should be "Paid in Full"
Step 3: Apply the Payment record of Customer A to the Journal Entry created in the first step:
1. Click "Accept Payment" on Customer record "Customer A"
2. Under the Invoices tab > select the Journal Entry
3. Under the Credits tab > select the Payment
4. Click Save
The Payment should be fully applied.