Receiving Payments from Customers

The sales cycle is complete only when payment is received. An invoice represents a legal obligation for the customer to pay, but until the money actually arrives in your bank account or cash register, it remains an outstanding receivable. Udyamo ERP Lite tracks every payment against every invoice, giving you a clear, real-time picture of who owes you how much and whether they are paying on time.

This chapter covers how to record payments received from customers, handle partial payments, link payments to invoices, and track outstanding balances.

What You Will Learn

• The payment receipt concept and how it differs from the invoice
• Available payment methods: cash, cheque, bank transfer, UPI, and others
• How to link a payment to a specific invoice
• How partial payments work and how they affect invoice status
• How payments update the balance due and invoice status automatically
• How to select the receiving bank account for proper bank reconciliation
• The payment audit trail for financial accountability

Prerequisites

• At least one invoice created and sent (Chapter 23)
• Bank accounts configured in the system (Chapter 35, recommended)
• Understanding of the invoice status lifecycle (Chapter 23)

The Payment Receipt Concept

A payment receipt in Udyamo ERP Lite records the fact that you have received money from a customer against a specific invoice. It is not a standalone financial event — every payment is linked to an invoice (the payable record). This linkage ensures that:

1. The invoice's balance due decreases by the payment amount.
2. The invoice's status updates automatically (from "sent" to "partially paid" or "paid").
3. The customer's total outstanding receivable is always accurate.
4. The accounting entries for the payment are generated correctly.

Each payment record carries a unique payment number for identification and audit purposes.

Payment Methods

Udyamo ERP Lite supports the following payment methods:

Tip: Record the payment method accurately. This helps during bank reconciliation — you can match bank statement entries with the recorded payment method and reference number.

Payment Fields

Required: The Amount, Payment Date, Payment Method, and the linked Invoice are mandatory fields. Without these, the payment cannot be recorded.

Step-by-Step: Recording a Full Payment

This example records a full payment of 1,59,300 received via bank transfer against an invoice for machined brackets.

1. Navigate to Sales > Invoices.
2. Open the invoice (e.g., Invoice INV-2026-0042, total 1,59,300.00, balance due 1,59,300.00).
3. Click on the Payments section or navigate to the payments tab within the invoice.
4. Click New Payment.
5. Enter the payment details:
   • Amount: 159300.00
   • Payment Date: 12-Feb-2026
   • Payment Method: Bank Transfer
   • Reference Number: UTRNEFT20260212001234 (the UTR number from the bank statement)
   • Bank Account: HDFC Bank Current Account (select the account where the money was received)
   • Notes: (optional) "Against INV-2026-0042 for MS Bracket Type A"
6. Click Create Payment to save.
7. The system updates the invoice:
   • Amount Paid: 1,59,300.00
   • Balance Due: 0.00
   • Status: Paid

Step-by-Step: Recording a Partial Payment

This example records a partial payment of 80,000 against an invoice with a total of 1,59,300.

1. Open the invoice (INV-2026-0042, total 1,59,300.00).
2. Click New Payment in the payments section.
3. Enter the payment details:
   • Amount: 80000.00
   • Payment Date: 05-Feb-2026
   • Payment Method: Cheque
   • Reference Number: 654321 (the cheque number)
   • Bank Account: SBI Current Account
   • Notes: "Partial payment, balance to follow"
4. Click Create Payment.
5. The system updates the invoice:
   • Amount Paid: 80,000.00
   • Balance Due: 79,300.00
   • Status: Partially Paid

When the remaining 79,300 is received later:

6. Open the same invoice again.
7. Click New Payment.
8. Enter:
   • Amount: 79300.00
   • Payment Date: 14-Feb-2026
   • Payment Method: Bank Transfer
   • Reference Number: UTRNEFT20260214005678
   • Bank Account: SBI Current Account
9. Click Create Payment.
10. The system updates the invoice:
    • Amount Paid: 1,59,300.00
    • Balance Due: 0.00
    • Status: Paid

Tip: Partial payments are common in manufacturing, especially for large orders. Customers may pay an advance, a second instalment on delivery, and the balance after inspection. Record each payment as it comes in — the system tracks the running balance automatically.

How Payments Update Invoice Status

The invoice status changes automatically based on the relationship between the total amount and the amount paid:

This means you never need to manually update an invoice's payment status. The system derives it from the actual payment records linked to the invoice.

Bank Account Selection

When recording a payment, selecting the correct bank account is important for two reasons:

1. Accounting accuracy. The payment creates an accounting entry that debits the selected bank account and credits the accounts receivable. Selecting the wrong bank account means your bank ledger will not match your actual bank statement.
2. Bank reconciliation. When you reconcile your bank statements (Chapter 35), the system matches recorded payments against bank statement lines. Payments recorded against the correct bank account make reconciliation straightforward.

Warning: Always select the bank account where the money was actually received. If a customer paid via NEFT to your HDFC account, do not record it against your SBI account. This creates discrepancies that are time-consuming to fix during reconciliation.

Outstanding Tracking

With every payment recorded against its corresponding invoice, Udyamo ERP Lite maintains a real-time view of your outstanding receivables. At any point, you can see:

• Total outstanding across all customers: The sum of all unpaid invoice balances.
• Customer-wise outstanding: How much each individual customer owes you.
• Age-wise analysis: How long invoices have been outstanding (e.g., 0-30 days, 31-60 days, 61-90 days, 90+ days). This is the accounts receivable aging report covered in Chapter 47.
• Overdue invoices: Invoices past their due date that still carry a balance.

This information is critical for cash flow management. A manufacturing business with healthy revenue on paper can still face cash crunches if customers are slow to pay.

Payment Audit Trail

Every payment record in Udyamo ERP Lite is permanent and traceable. The system maintains:

• Who recorded the payment (user ID)
• When the payment was recorded (timestamp)
• The exact amount, method, and reference number
• Which invoice the payment was applied to

This audit trail is essential for:

• Internal controls. If there is a discrepancy between the bank statement and the ERP records, the audit trail helps identify where the error occurred.
• Tax audits. Auditors can trace every payment from the bank statement to the ERP record to the corresponding invoice.
• Dispute resolution. If a customer claims they have already paid, you can pull up the payment records with reference numbers and dates.

Tip: Always enter the reference number (UTR, cheque number, UPI transaction ID) when recording a payment. This is the key that links your ERP record to the bank statement entry and makes reconciliation and dispute resolution possible.

Tips & Best Practices

Tip: Record payments on the same day they are received. Delayed recording leads to stale outstanding reports, incorrect cash flow projections, and confusion during bank reconciliation.

Tip: For cheque payments, record the payment when the cheque is received, not when it clears. If the cheque bounces, record a reversal. This keeps your records aligned with the actual sequence of events.

Warning: Never record a payment for more than the invoice's balance due. If a customer overpays, record the payment up to the balance due and handle the excess as a credit note or advance — consult your accountant for the correct treatment.

Tip: Use the outstanding reports (Chapter 47) in your weekly collections review. Sort by overdue days to prioritise follow-ups with customers who have the oldest unpaid invoices.

Quick Reference