# Payment Entry

A **Payment Entry** records money received from customers or paid to suppliers. You typically create a payment entry against a sales or purchase invoice, but you can also record standalone payments like employee reimbursements.

![](https://guides.smurps.com/uploads/images/gallery/2025-12/scaled-1680-/ECGpe-sales-png.png)

To record a payment against an invoice:

1. Go to **Home → Accounting → Accounts Receivable/Payable → Payment Entry** and click **New**.
2. Select the **Party Type** (Customer or Supplier), **Party**, and the invoice. The system sets the **Payment Type** automatically (Receive for customers, Pay for suppliers).

[![payment-party.png](https://guides.smurps.com/uploads/images/gallery/2025-12/scaled-1680-/payment-party.png)](https://guides.smurps.com/uploads/images/gallery/2025-12/payment-party.png)

3. Set the **Posting Date** and **Mode of Payment**. The **Paid From/To** accounts are pulled from your company settings.

[![payment-accounts.png](https://guides.smurps.com/uploads/images/gallery/2025-12/scaled-1680-/payment-accounts.png)](https://guides.smurps.com/uploads/images/gallery/2025-12/payment-accounts.png)

4. The outstanding invoice amount appears; edit **Paid Amount** if you’re making a partial payment. Allocate the payment to specific invoices if multiple are listed.
5. Save and **Submit** to update the ledger and the invoice’s outstanding amount.

You can also create a payment entry without linking an invoice. Choose the party and account, enter the amount in the **Allocated Amount** column, and specify any deductions or write‑offs (such as currency exchange differences). The **Difference Amount** must be zero for submission; use the **Make Difference Entry** button to book the difference into a write‑off account. After submitting, the system updates the related invoice or order and reflects the payment in accounts receivable/payable.