Mastering Split Payments in QuickBooks Online: Cash and Card Made Easy!

In the world of small business, every transaction tells a story. Some customers might pay their invoices in full with a single swipe, while others split their payments between cash and a card. As a business owner using QuickBooks Online (QBO), knowing how to record these mixed payments accurately is key to maintaining clean, balanced books. But don’t worry—I’ll walk you through it, step by step.

Imagine a customer walks in to settle an invoice. They give you part of the payment in cash and the rest on a debit card. Now you’re faced with the task of recording both payments in QuickBooks Online, ensuring that everything lines up at the end of the day. It sounds a bit tricky, but once you know how to navigate QBO’s tools, it’s smooth sailing.

Step 1: Find the Invoice

The first thing you’ll need to do is pull up the invoice. In QBO, head over to the Sales tab on the left-hand side. From there, click on Invoices. You’ll see a list of your outstanding invoices, and you can find the one for your customer by searching for their name or invoice number.

Once you’ve found the correct invoice, click on it to open it up. You’re going to need to enter two separate payments, so let’s start with the cash portion.

Step 2: Record the Cash Payment

To log the cash payment, look for the Receive Payment button at the top right of the invoice screen and click it. This will open up the Receive Payment window. Here, you’ll see the customer’s name, their outstanding invoice, and a few fields you’ll need to fill out.

In the Payment Method dropdown, choose Cash. You’ll then enter the amount they paid in cash under Amount Received. Now, in the Deposit to field, select the account where you’ll keep this cash until it’s deposited. Many businesses use Cash on Hand as a temporary holding account before they actually deposit the cash into their bank account.

After you’ve filled everything in, click Save and New. This will record the cash payment and bring you right back to the screen where you can enter the rest of the payment—this time, for the debit card.

Step 3: Log the Debit Card Payment

Now that the cash payment is taken care of, it’s time to handle the card payment. Still in the Receive Payment window, make sure the customer’s name and invoice are correct. But this time, in the Payment Method dropdown, select Debit Card.

Enter the remaining balance they paid via debit card in the Amount Received field. In the Deposit to field, choose the appropriate account for the debit card payment. If you batch your card payments before depositing them into your bank account, you might use Undeposited Funds. If you deposit the payment directly into your bank account, choose your Checking Account or whatever account you typically use.

Once you’ve filled out the details, click Save and Close. That’s it—you’ve now successfully recorded both the cash and debit card payments, and your books will reflect both transactions.

Step 4: Double-Check Your Records

It’s always a good idea to double-check your records after you’ve entered a split payment. Go back to the invoice in QBO, and you should see that it’s marked as Paid. You can also run a quick Transaction Report to ensure that the payments are recorded correctly and match your actual deposits.

Keeping accurate records is essential to managing your business’s finances. By properly logging split payments, you’ll avoid confusion down the line when reconciling accounts or preparing for tax time.

Why Recording Split Payments Matters

You might wonder, why go through all this trouble to record split payments? Here’s the deal: your books need to be accurate so that you know exactly where your money is going. When customers split payments, recording them correctly allows you to stay on top of your cash flow, manage bank reconciliations with ease, and ensure you’re not missing any funds that should’ve been deposited.

Accurately logging mixed payments also builds trust with your customers. When your books are in order, you can confidently tell a customer what their balance is, if they’ve overpaid, or if there’s still a payment pending.

Tips for a Smooth Experience in QBO

1. Use the Undeposited Funds account: If you’re taking multiple payments throughout the day and depositing them later, the Undeposited Funds account can be your best friend. It lets you combine payments into a single bank deposit, making reconciliation easier.

2. Create a consistent routine: Whether you’re logging payments daily or weekly, consistency helps you avoid errors. Set a time to record your transactions and double-check your work.

3. Reconcile regularly: The more often you reconcile your accounts, the easier it will be to spot and fix any discrepancies.

Conclusion: You’ve Got This!

Split payments can seem like a lot to manage, but with QuickBooks Online, the process is straightforward. By recording each payment separately—cash and debit card—you ensure that your books stay balanced, and your financial records remain clear and accurate.

Keeping up with your payments, whether they’re split or not, is a key part of running a successful business. QuickBooks Online gives you the tools to handle these transactions with ease, so you can spend less time worrying about your books and more time focusing on growing your business.