If you add sales invoices and purchase invoices (bills) to your accounting software, they are all shown as unpaid. When you receive/pay that invoice, the income/expense transaction will be imported into your bank account. When you categorise/reconcile/explain that transaction, you will need to match it to the invoice already created. This will change the invoice from unpaid to paid.

Do not categorise the bank transaction as a sale/cost, otherwise you will duplicate the sale/cost that was created when you added the invoice. If you have, see below.

The way to match a bank transaction to an invoice is different for each accounting software. Here are some links to help you…

Xero – Match to an existing transaction

QuickBooks – Match with an existing transaction

Pandle – How to process an invoice payment through banking

Freeagent – How to mark an invoice as paid

Freeagent – How to pay a single bill

To fix sales/costs that have been duplicated because the bank transaction has not been matched to the invoice, you have two options.

1. Redo the bank transaction. Find the income/payment in your bank account that has been categorised to sales/costs instead of matched against an invoice. Undo the categorisation. Match it against the invoice.
2. Void the invoice. If the bank transaction has been categorised correctly (i.e. the same as the invoice), you can find the invoice and void it in the options.