This article applies to Aiwyn Practice. The Transactions ledger in Accounts Receivable, where payments are allocated, is available only to firms on Aiwyn Practice.
This article explains why a payment recorded in Accounts Receivable doesn't clear an invoice until it's allocated, and what unallocated money does to the balances your firm and your client see.
A payment only pays an invoice once it's allocated
An invoice records that a client owes money. A payment records that money arrived. The two are separate records, and nothing connects them until someone allocates the payment to the invoice.
Allocation is that link. When you record a payment, the Allocation section lists the client's open invoices, and you choose which ones the payment pays. Credit adjustments and write-offs are allocated in the same area. Credit adjustments can be allocated to invoices, but not to debit memos. Debit memos behave like invoices when receiving payments.
Until a payment is allocated, both records stand on their own. The invoice stays open with its full balance, and the payment sits on the client's account without paying anything. An invoice moves to Paid only once allocations cover its whole balance.
The Allocation column on the Transactions list shows where each transaction stands:
- Filled green: fully allocated.
- Yellow: partly allocated.
- Empty: unallocated.
Unallocated money makes a client look like they owe more than they do
Because an unallocated payment hasn't closed anything, every view that reads open invoices still counts the money as owed. The invoice keeps its Outstanding balance on the Invoices list, and once its due date passes it shows Overdue even though the client has paid. That's the usual reason an invoice shows Overdue after a client pays.
The same open balance flows into the figures built from it. In the Outstanding AR report, unallocated payments feed the Unallocated Payments KPI while the open invoice remains in the AR balance and aging buckets. This can overstate figures in AR KPIs & Charts and the Client, Partner and Office AR Insights tabs. In Client AR Insights, a known issue can place unallocated payments in an Unassigned client bucket.
Overdue invoices are also what Collections chases, so a paid but unallocated invoice can still prompt a collection statement or automated statement email. The statement can show conflicting figures between its current-balance header and aging buckets when the payment hasn't been applied.
That's why the Unallocated badge above the Transactions list is a live count rather than a report. Each transaction behind the number points to money that hasn't yet reduced an invoice's open balance.
Your client's portal follows the same allocations
The client portal decides what a client owes from how their transactions are allocated, not from the account total alone. An unallocated payment or credit doesn't reduce the amount shown as owed. Unapplied credits appear in the portal, where the client can choose to apply one to an invoice balance. An unallocated payment doesn't appear as available credit.
Payments clients make through Aiwyn against a specific invoice are allocated to that invoice automatically. By contrast, payments made through a Quick Payment Link always arrive unallocated and must be assigned afterwards.
So allocation isn't only internal bookkeeping. It decides what your client is asked to pay and which payments write back or reconcile to the practice management system.
Money arrives unallocated for different reasons, and not all of them are mistakes
Knowing how a transaction became unallocated tells you whether it's an error to fix or a queue to work.
- A payment was saved without an allocation. Someone recorded the payment and didn't select an invoice in the Allocation section. This is an oversight.
- A client paid through a Quick Payment Link. These payments always arrive unallocated. That's expected: the link lets someone pay without a portal account, so the firm allocates the payment afterwards, and assigns the payer to a client record if they weren't one yet.
- A credit adjustment has no invoice to apply to yet. The source procedure allocates a credit adjustment to open invoices only "if applicable", so a credit can be held on the client's account on purpose.
- Money came in before there was an invoice to pay. Retainers and advance payments are recorded as unallocated payments because there is no invoice to apply them to yet.
Allocation can be partial
One payment can be split across as many invoices as it covers, and can leave part of itself unallocated. An invoice that a payment only partly covers stays open at a reduced balance. On the Transactions list, a payment that's only partly applied shows a yellow dot until the rest of it is allocated.
A payment belongs to one client or entity. It can be split across that client's invoices, but it can't be moved to another client or entity, including another client in the same group. To pay invoices for two clients, the firm records a separate payment for each.
For the other common reason a balance survives a payment, a payment that never completed, see Why an invoice still shows a balance after a payment.
Fixing an allocation changes what's applied, not the record of what was received
Transactions in Accounts Receivable are permanent records. They aren't deleted, so correcting a mistake means changing what a payment or credit is applied to, or recording a reversing transaction, rather than removing it.
Your team can change a saved allocation within the same client, including one created automatically when a client paid an invoice through Aiwyn. In Accounts Receivable → Transactions, open the payment, select the Edit allocations pencil, adjust the selected invoices and amounts, then save. The original invoice returns to outstanding if its allocation is removed, and the change is captured in the audit log. Clients can't reallocate payments themselves.
A payment can't be reallocated to a different client or entity. To correct that situation, disable the original transaction and recreate it for the correct client. See Why AR transactions are corrected, not deleted.
For the steps to allocate a payment, see Record and allocate payments.
Related
- Record and allocate payments
- Why an invoice still shows a balance after a payment
- Clear an invoice that still shows Overdue after the client paid
- How an invoice becomes paid or overdue
- How Accounts Receivable fits the billing lifecycle
- How write-offs differ from credit adjustments
- Why AR transactions are corrected, not deleted
- Record adjustments, memos and write-offs
- Use Quick Payment Links
- Transactions list reference
- Outstanding AR report reference