Vendor has told me that their invoice was marked as paid but they hadn't actually sent a payment

There are a couple of reasons why the invoice is marked as paid, @knckeys. I'll share it with you together with some tips.

I want to confirm first if you're referring to an invoice you sent to your customer. If so, your client likely has an unused credit in QuickBooks Online that was automatically applied when you created the invoice.

Make sure to disable the  Automatically apply credits feature. This prevents customer credits from being automatically used. Also, it allows you to decide which open invoices you want to apply credit memos to. Here's how:

1. Click on Settings ⚙, then go to Account and settings.
2. Hit Edit ✎ in the Automation area.
3. Turn off Automatically apply credits.
4. Click on Save, then hit Done.

Additionally, you can review the payment details to verify where it's coming from. If your customer insists on not making the payment, I suggest you unlink or delete the payment to change the status to unpaid. I'll show you how:

1. Open the invoice.
2. Under PAYMENT STATUS, click on the payment link.
3. Click on the date hyperlink of the payment made.
4. Select Clear Payment from the bottom right. Or uncheck the payment to unlink.
5. Click on Save and new or Save and close. See the snapshot below for reference.

After that, you can resend the invoice.

If you're all set, here are extra help articles about handling invoice payments and personalizing invoices in QBO:

• Record invoice payments in QuickBooks Online
• Customize invoices, estimates, and sales receipts in QuickBooks Online

You can always get back to us if you need more guidance with invoices, payments, or QuickBooks. I'd be glad to back you and your business. Have a good one and stay healthy!