A practical, step‑by‑step guide to generating, sending, and tracking invoices in the Sales → Invoices page—with statuses such as Overdue and Not yet due, best practices, mistakes to avoid, and a concise FAQ.
Overview
In QuickBooks Online (QBO), you create invoices from the Sales → Invoices page or the + New button. Each invoice captures customer details, items or services, taxes, terms, and payment options (including online payments with QuickBooks Payments). QBO also tracks invoice states so you can quickly see what’s due soon, overdue, paid, or deposited.
What the status labels mean
- Not yet due: Open balance, due date is in the future.
- Due in X days: Approaching due date; helps prioritize follow‑ups.
- Overdue: Past the due date with an unpaid balance.
- Sent / Viewed: Customer was emailed and may have opened it.
- Paid / Deposited: Payment received and (optionally) banked.
- Delivery issue: Email bounced or couldn’t be delivered; verify the address and resend.
- Voided: The invoice no longer affects balances but remains in the audit trail.
Before You Start: One‑Time Setup That Saves Time
- Customers: Go to Sales → Customers and add complete profiles (email, billing/shipping addresses, terms, tax status).
- Products & Services: Define items in Settings → Products and services with income accounts, prices/rates, and tax codes. Turn on inventory if you sell goods that you stock.
- Taxes: Configure sales tax in Taxes so QBO can calculate the correct rate automatically (where applicable).
- Payment options (optional): If you accept online payments, enable QuickBooks Payments and toggle the methods (ACH, card, wallet) you’ll offer on invoices.
- Invoice design: Customize the look and defaults (logo, colors, messages, terms) so every invoice is consistent with your brand.
Create an Invoice (Step by Step)
Open a new invoice
- In the left navigation, select Sales and choose Invoices. Click New invoice. Alternatively, use + New → Invoice.
- Select the Customer. Confirm the email address (used for sending and for the payment link).
Header & terms
- Set Invoice date and Due date (or pick Terms, e.g., Net 15/30). The due date determines “Not yet due” vs “Overdue.”
- Add a P.O. number if your customer requires it.
- Enter billing and, if shipping physical goods, shipping address.
Line items
- Click Add product or service and select items. For services, you can add quantity (hours) and rate; for products, QBO can pull price and tax settings from the item.
- Use the Description column to clarify scope (dates, milestones, or service period).
- Apply discounts or shipping if needed. If sales tax applies, ensure the item is marked taxable and a tax is selected.
- To add a subtotal line (e.g., per phase), insert a subtotal below grouped items for clearer presentation.
Notes, attachments, and custom fields
- Use Message to customer for payment instructions, remittance details, or late‑fee language.
- Attach supporting files (signed work order, timesheet, delivery receipt). Keep individual files reasonably small for smooth delivery.
- If enabled, complete custom fields (e.g., project, job number) and assign Class or Location for reporting.
Payment options and automation
- Click Payment options to toggle ACH/card on this invoice if you use QuickBooks Payments.
- Enable automatic reminders if you want QBO to nudge customers before/after due dates.
- Double‑check totals at the bottom: subtotal, discounts, shipping, tax, and balance due.
Send, Share, and Print
- Click Review and send to preview the email. Edit the subject and body to include clear due‑date language and the payment link.
- Select Send. The invoice status becomes Sent (and later Viewed when opened).
- Alternatively, choose Share link to copy a secure payment link. You can also Print for mail or Save as PDF.
- If an email bounces (Delivery issue), confirm the address, resend, or share the link through another channel agreed with the customer.
Email copy you can reuse:
Subject: Invoice {INV-###} due {Due Date} | {Your Company}
Body: Hi {First Name}, thanks for your business! Please find invoice {INV-###} for {Amount} due {Due Date}. You can view and pay securely here: {Invoice Link}. If you have questions, reply to this email. Thank you!
Track Status & Follow Up
Return to Sales → Invoices to see the status column and at‑a‑glance charts for unpaid vs paid amounts (including Overdue vs Not yet due). Click a status to view details and activity (sent, viewed, partial payments).
Smart follow‑ups
- Due soon: Send a friendly reminder 3–5 days before the due date with the payment link.
- Overdue: Escalate politely. Include original terms, late‑fee policy (if applicable), and options to pay. Offer ACH to reduce fees and friction.
- Disputed: Pause collection tone, gather documentation (estimate, delivery proof, change orders), and resolve scope/quality issues first.
- Partial payments: Keep the invoice open until fully settled; QBO will show the remaining balance.
Receive & Record Payments
When customers pay online
If you’ve turned on online payments, QBO records the payment to the proper clearing or bank account and links it to the invoice automatically. You’ll still reconcile deposits in Banking to match payouts.
Recording external payments
- Open the invoice and choose Receive payment.
- Pick the payment method (e.g., cash, check, external processor) and deposit to account (Undeposited Funds or a bank account).
- Enter the amount, reference (e.g., check #), and the payment date. Save. The invoice status becomes Paid.
- When you later record the bank deposit (for Undeposited Funds), QBO marks it Deposited.
Common Mistakes to Avoid
- Wrong email or missing contact: Double‑check the customer profile before sending.
- No terms / ambiguous due date: Always set Terms to drive accurate status tracking.
- Unmapped items: Products & services should point to the correct income accounts and tax codes.
- Forgetting attachments: Add proof of work or delivery to minimize disputes.
- Using generic descriptions: Clarify scope, units, dates, and rates so customers approve quickly.
- Not enabling payment options: Offering ACH can reduce late payments and lower fees.
- Overwriting paid invoices: Use credit memos, refunds, or new invoices for adjustments rather than altering paid documents.
- Ignoring delivery issues: If email bounces, share the secure link or confirm a secondary contact.
Helpful Tips & Best Practices
Design & workflow
- Create reusable templates for common jobs (e.g., fixed‑fee, time‑and‑materials).
- Use Classes/Locations to segment revenue by line of business or branch.
- Enable reminders and late fees (if allowed) to automate follow‑ups.
- Batch send invoices for recurring services to save time each billing cycle.
Cash flow & controls
- Offer early‑pay incentives (e.g., 2/10 Net 30) when appropriate.
- Prefer ACH for larger invoices; it’s cheaper than cards and reduces chargeback risk.
- Set clear late‑fee policy and show it on every invoice.
- Reconcile payouts and deposits in Banking weekly to catch issues early.
Real‑World Scenarios
1) U.S. small business owner — monthly services
A marketing consultant bills a flat monthly retainer. They set a template with Net 15 terms, enable ACH, and schedule reminders 3 days before due date. In Sales → Invoices, they filter by Overdue weekly to follow up. Cash flow improves because clients pay directly from the invoice link.
2) Travel agency — tour packages with deposits
The agency invoices a 30% deposit upfront and the balance 14 days before departure. They create two invoices: one now (deposit) and one scheduled later (balance). Each invoice includes itinerary, traveler names, and cancellation terms. Attachments include supplier confirmations. ACH is offered to minimize card fees.
3) Wellness clinic — services by category
The clinic bills visits, packages, and supplements. Items are categorized (Services vs Products) with correct tax settings. Staff attach intake forms and SOAP notes when needed. Reports by Class show revenue by service line, helping the clinic optimize pricing and staffing.
Legal & Compliance Notes
- Accurate records: Keep invoice copies, delivery proofs, and correspondence for your retention period.
- Sales tax: Ensure you’ve set up nexus/tax collection where required and that items are correctly marked taxable/non‑taxable.
- Privacy: Invoices can include personal information (names, addresses). Share via secure links and update email addresses only at the customer’s request.
- Charges & refunds: Issue credit memos or refunds through QBO to maintain a clear audit trail.
- Terms of service: Present late‑fee and dispute language consistently on all invoices.
FAQ
How do I start an invoice fast?
Use + New → Invoice, select the customer, add items, and click Review and send. Save a template for repeat jobs.
What if a customer pays part of an invoice?
Record a partial payment via Receive payment. QBO shows the remaining balance until fully settled.
The email bounced. What now?
Verify the address, then resend. You can also Share link and deliver it through a confirmed channel (e.g., portal or SMS if agreed).
Can I add late fees automatically?
Yes. Turn on late fees in invoice settings where available, and disclose the policy in your messages/terms.
How do I see only overdue invoices?
Go to Sales → Invoices, filter by Overdue, and sort by due date or customer.