On-account payment
A payment recorded against a customer's account as a whole rather than specific invoices, usually until it's clear what the payment is for.
Posting cash on account is a holding step: the customer's balance goes down, but individual invoices stay open. It's common for prepayments and for payments that arrive without usable remittance.
Left too long, on-account balances make aging reports misleading and statements confusing, so they need regular follow-up until they're applied.
Related terms
- Unapplied cashPayments received but not yet matched to specific invoices, left sitting on the customer's account or in a suspense account.
- Cash applicationMatching incoming payments to the open invoices they pay and posting them in the ERP, so receivables and cash stay accurate.
- Statement of accountA summary sent to a customer listing every open invoice, credit and payment on their account, with the total balance due.