Open Balance vs. Overdue Payment in QuickBooks Online: What You Need to Know

If you manage customer invoices in QuickBooks Online (QBO), you’ve likely encountered a customer with an Open Balance and an Overdue Payment.
 
While they may seem similar, these terms represent different aspects of your accounts receivable.
 
Understanding the distinction between Open Balances and Overdue Payments is important for accurate bookkeeping and effective customer communication.
 
In this post, we’ll break down the differences, explain how to manage them and share tips for keeping your accounts in order.

What Is an Open Balance in QuickBooks Online?

An Open Balance refers to the total amount a customer owes your business.

It includes all unpaid invoices, regardless of whether they are past due or not.

Essentially, the Open Balance is a snapshot of the customer’s outstanding account balance at any given time.

For example:

  • A customer has two invoices: one for $500 due next week and another for $300 that is overdue.
  • The Open Balance would be $800, which includes both invoices.

Open Balances are useful for tracking overall customer receivables and understanding cash flow.

What Is an Overdue Payment in QuickBooks Online?

An Overdue Payment is a specific subset of the Open Balance.

It only includes invoices or portions of invoices that are past their due date.

Overdue Payments represent the amount a customer owes that requires immediate attention or follow-up.

For example:

  • Using the same scenario above, if the $300 invoice is overdue while the $500 invoice is still within its due date, the Overdue Payment would be $300.

Overdue Payments are critical for prioritizing collections and maintaining positive cash flow.

How to View Open Balances and Overdue Payments in QBO

QuickBooks Online makes it easy to track both Open Balances and Overdue Payments with built-in tools and reports.

On a customer screen, you’ll see the Open balance and Overdue payment amounts in the Summary section.

Summary section of a Customers screen in QBO

View All Open Balances

You can use the Open Invoices report if you’d like to see the Open balance for all your customers.

You can search on the Reports screen for Open Invoices or use the search in the top menu.

Either way, you’ll see a list of all open invoices grouped by customer. The Open balance is on the far right.

Open Invoices report showing the open balance for customers in QBO

View All Overdue Payments

You can use the Invoices tab in the Sales section to view a list of all your overdue payments. 

To get there click Sales -> Invoices in the left side menu.

Navigating to the Invoices list in QBO 

Overdue invoices/payments will appear at the top of the list with an orange warning icon.

Invoices list in QBO with overdue payments

Accounts Receivable Aging Report

Another option is to view the Accounts Receivable Aging Summary report. 

This report groups customer’s overdue invoices by age (e.g., 0-30 days overdue, 31-60 days overdue) to help you prioritize collections.

A/R Aging Summary report in QBO

How to Manage Open Balances and Overdue Payments

For Open Balances:

  • Review Regularly:
    Monitor customer accounts to identify trends or increasing balances that may require intervention.

  • Send Account Statements:
    Generate and send account statements to customers to inform them of their outstanding balances.

For Overdue Payments:

  • Offer Payment Plans:
    For customers struggling to pay overdue amounts, consider offering a payment plan to recover funds incrementally.

  • Apply Late Fees:
    If your terms allow, adding late fees can encourage timely payments and offset the cost of late collections.

Final Thoughts

Understanding the difference between Open Balance and Overdue Payment in QuickBooks Online is key to managing your receivables effectively.

By monitoring these metrics and leveraging QuickBooks’ tools, you can maintain accurate records, improve cash flow, and build stronger customer relationships.

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Below is a video if you prefer to watch a walkthrough.

If you have questions about managing customer invoices or need help optimizing your QuickBooks Online setup, click the green button below to schedule a free consultation. Keeping your accounts in order has never been easier!

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This content is for information purposes only and should not be considered legal, accounting, or tax advice, or a substitute for obtaining such advice specific to your business. Additional information and exceptions may apply. Applicable laws may vary by state or locality. No assurance is given that the information is comprehensive in its coverage or that it is suitable in dealing with a customer’s particular situation. Gentle Frog, LLC does not have any responsibility for updating or revising any information presented herein. Accordingly, the information provided should not be relied upon as a substitute for independent research. Gentle Frog, LLC does not warrant that the material contained herein will continue to be accurate, nor that it is completely free of errors when published. Readers and viewers should verify statements before relying on them.

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