I have a customer invoice payment that is showing up as a credit for that customer and as an unapplied payment. How do I fix it so new invoices are not reduced by it.

I appreciate your detailed information, Dpracing.

I'll lay down some solutions to help you fix your new invoices from getting deducted for credit in QuickBooks Online (QBO).

In QBO, if a customer invoice payment is showing up as a credit for and as an unapplied payment, it's because of how the payment was initially recorded. To ensure your new invoices will not reduced, you can turn off the automatically apply credit feature in the Account and Settings section. This way, the credit will not be automatically applied to new invoices.

Here's how:

1. Go to the Gear Icon, and select Account and Settings.
2. On the left panel, select the Advanced menu.
3. Scroll down and select the Automation section, then click it to edit.
4. Turn off the Automatically apply credit.
5. Select Save and then click Done.

Once you turn it off, you can unlink the unapplied payment to your new invoice if it's already applied to your new invoice.  

For Old Layout Invoice:

1. Go to your Invoice on which the unapplied payment got linked.
2. Under the Payment Status, select the 1 payment made hyperlink.
3. Select the hyperlink date.
4. In the received payment, uncheck the invoice on which the invoice was linked. 
5. Once done, select Save and Close.

For Modern Layout Invoice:

1. Go to your Invoice on which the unapplied payment got linked.
2. Scroll down and under the Invoice total select the payment hyperlink.
3. Uncheck the Invoice again, then select Save and Close.

I'll add this article to guide you in reconciling your accounts so they always match your bank and credit card statements: Reconcile an account

Feel free to leave a comment below if you have any other questions about preventing the new invoice from getting deducted for credit. I'm always here to help, Dpracing. Wishing you and your business continued success.