I have some money in Unapplied Cash Income account which I need to offset against a Customer's Invoice. What is the best way to deal with this please?

Hello, steve314.

I'm here to share the steps to offset against the customer invoices in QuickBooks Online. We can use the receive payment feature to find a simple and efficient way to handle payments and manage your accounts receivable. This feature lets you offset the invoice against the customer from the Unapplied Cash Income account, allowing you to apply charges quickly and efficiently while keeping track of your finances.

Using the receive payment feature, you can easily record customer payments and reconcile your accounts. When a customer makes a payment, you can apply it to the relevant invoice and record it as a deposit in your bank account. This way, you can keep track of all your financial transactions and ensure that your books are up to date.

But to help fix this, you must take a few steps. Firstly, you should locate the deposit entry in your bank register. This can be found by reviewing your transaction history or searching your account activity for the relevant deposit amount.

Once you have located the deposit entry, you will need to edit the account associated with it. Specifically, you should change the account from Unapplied Cash Payment Income to the Debtors account. This change will ensure the deposit is appropriately categorised and reflected under the Credits section when you receive payments. 

Then, we can link a payment to an invoice, go to the Receive Payment screen, and locate the invoice you want to connect the payment to under the Outstanding Transactions section. Verify the amount and select the checkbox next to the invoice. Once you do that, you will see the deposit under the Credits section. When you're ready to link them, click Save and close. I have attached a screenshot below for your reference.

You can go through this article to help guide you in linking the transactions: Unapplied cash payment income on your profit and loss.

Get back to me if you have any other questions. I'm here to help you resolve the issue soon and restore your business process. Have a great day!