When a Receipt from and Customer or Payment to a Supplier is entered in the accounting software you are prompted to Allocate it against open Invoices for that Customer or Supplier.Click on ‘Auto Allocate’  to allocate the full outstanding amount or full Unallocated amount to the high-lighted invoice.

The receipt or payment does not have to be allocated at this point. Allocations can be viewed and changed later by selecting ‘Allocations’ on the browse screen.