When applying payment to a group of invoices, and there is a deduction such as a shortage of merch received, where do i apply it on the payment screen?

Welcome to the Community space,

I'll help you apply payment invoices and record a deduction for a shortage of products received in QuickBooks Online (QBO). 

Please note that adding a deduction on the payment screen is unavailable in QBO. To add a deduction, you can consider editing the invoice and create a non-inventory product first under the Expense account and name it a deduction to be added as a line item on the invoice.

Here's how: 

1. Go to the Gear icon and choose Products and services.
2. Click New, then select Non-inventory.
3. Name it and enter the deduction as the Category.
4. Put a little description if you want.
5. Leave the price/rate blank, and under the Income account, choose the nearest expense account for the deduction.
6. Once done, click Save and close.

Here's how to add a line item to the invoice:

1. Go to Sales and select Invoices.
2. Choose the invoice you want to add the line item and click Edit under the Action tab.
3. Under the Product/Service, add the deduction item you've created.
4. Make sure to add the amount in negative to minus this with the total amount of the product purchased.
5. Once done, click Save and close.
6. Proceed to receive payments.

Alternatively, once the payments clear in your bank, you can consider creating a bank deposit for the payments of the group of invoices. Here's how:

1. Go to the +New button and select Bank deposit if a bank deposit hasn't been created yet. If a bank deposit has already been created, proceed to Step 3.
2. Select the sales receipt you want to match with the downloaded transaction.
3. Scroll down to the Add funds to this deposit section.
4. Enter the fee as a line item.
5. Select who the fee was from.
6. Select the appropriate expense account from the Account drop-down menu.
7. Enter the amount fee as a negative number. For example, if the fee was US $5.25, enter –5.25.
8. Review the deposit total with the bank fee.
9. Select Save and close.

Moreover, here's an article to help you combine multiple transactions into a single record so QuickBooks matches your real-life bank deposits: Record and make bank deposits in QuickBooks Online.

Return to this post if you have other concerns about receiving invoice payments in QBO. I'll be here to lend a hand.