Marking a Bill or Invoice as Paid (External Payments)
If a bill or invoice was paid outside of Digits (for example, a mailed check, wire, or a separate system), you can mark it as paid to keep your AP, AR, and reports accurate. No money moves in Digits—this is a record update for tracking and reconciliation.
Marking a Bill as Paid (AP)
If your client paid a bill outside of Digits:
From your client's dashboard, click Bills & Invoices → Bills in the left navigation menu.
Find the bill, then click More Actions in the top-right corner.
Select Mark as Paid.
Choose the payment date.
Select the Pay Out Category — the account the payment came from, usually the bank account the money left or the credit card you paid with.
(Optional) Add a reference number (e.g., a check number) and/or an internal memo for context.
Click Mark as Paid to confirm.
Good to know:
You can only mark as paid if all required fields on the bill are complete; otherwise, the action is disabled.
This does not send money or notify the vendor. It’s a record update for tracking and reconciliation.
This action can't be undone (same as invoices—your only recourse afterward is to void).
You can't set a payment date that falls on or before a closed-period date, or before the bill date—those dates are disabled in the picker and will show an error.
Marking an Invoice as Paid (AR)
If a customer paid an invoice outside of Digits (check, wire, or a transfer):
From your client's dashboard, click Invoices in the left navigation menu.
Open the invoice and select Mark as Paid.
Choose the payment date.
Select the account where the payment was received—almost always the bank account the funds landed in.
(Optional) Add a reference number (e.g., a check number) and/or an internal memo for context.
Click Mark as Paid.
Notes:
The Pay In list includes only balance sheet accounts (bank, asset, liability, and equity accounts). Select the bank account where you received the payment.
Revenue was already recorded when the invoice was created, so marking it as paid simply debits the bank account and credits Accounts Receivable to settle the balance. (This is also why revenue accounts aren't offered here—selecting one would double-count income.)
Marking an invoice as paid confirms the payment was collected outside of Digits, and this action can't be undone.
Digits Invoice Clearing is applied automatically only when a customer pays through Digits. You don't select it for offline payments.
This is a record update—no funds move in Digits.
Frequently Asked Questions
Will marking a bill or invoice as paid update the ledger automatically?
Yes. Digits records the payment against the bill or invoice and updates the ledger so AP or AR stays accurate.
If I manually mark a bill or invoice as paid, can I attach proof of payment?
Yes. Add a note in Comments and upload supporting docs (e.g., a cleared check image) to Vault.
Can I undo Mark as Paid?
No. Once an invoice is marked as paid, the action can't be undone.
If you marked an invoice as paid by mistake, you can:
Void the invoice. This cancels the invoice and posts a reversing entry to reverse the accounting. Voiding is permanent and can't be undone.
Duplicate the invoice if you need to reissue it, then send the new copy to your customer.
Why is "Mark as Paid" greyed out?
Mark as Paid stays disabled until the bill is complete: a real vendor must be selected (not just scanned text), and the bill needs an amount greater than zero, a bill date, a due date, and valid line items. Hover the button to see exactly what's missing.
How does marking a bill as paid affect my books?
Use Mark as Paid (in the bill's ⋯ More Actions menu) when a bill was paid outside of Digits — by check, wire, or from another system.
You'll be asked for the payment date and a Pay Out Category — choose the bank or credit card account the payment actually came from. If you paid from your checking account, select that checking account; if you paid by credit card, select that card.
Digits then records one entry: Accounts Payable goes down, and the payment is recorded against the account you selected. The expense itself isn't affected — it was recorded when the bill was created. When the payment appears in your bank or card feed, Digits matches it to the recorded entry, so nothing is double-counted.
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