How payment allocation works

When you record a payment against a customer, Hisaabkar applies it using FIFO (First In, First Out) allocation:

1. The payment is applied to the customer's oldest outstanding invoice first.
2. If the payment fully covers that invoice, any remaining amount rolls forward to the next-oldest outstanding invoice.
3. This continues until the payment is fully allocated, or all outstanding invoices are settled.
4. If any amount is left over after all outstanding invoices are paid, it's recorded as a customer credit balance and automatically applied to the customer's next invoice.

You don't need to pick which invoice a payment applies to — Hisaabkar allocates it consistently every time, and you can see exactly how a payment was split from the customer's ledger page.