# Unallocated payments explained

> A guide to how unallocated payments are created and managed in Caspen.

Source: https://support.caspen.com/billing/payments/unallocated-payments-explained
Documentation index: https://support.caspen.com/llms.txt

## Overview
Unallocated payments represent money you have received from a client that has not yet been applied to any invoice. These payments remain on the client’s account until you decide to allocate them.

This allows accurate tracking of **prepayments, deposits, bulk payments, and overpayments**.

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## How unallocated payments are created
Unallocated payments can be created in two ways:

#### 1. Overpayments on an invoice
If a staff member manually records a payment **greater than the invoice total**, the extra amount becomes an **unallocated payment** on the client’s account.\
Clients cannot overpay through online payment methods. Overpayments can only occur when recorded by a team member.

#### 2. Standalone payments
Standalone payments recorded without linking to an invoice automatically remain unallocated until you choose to use them.

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## Where unallocated payments appear
You can view unallocated payments in three places:

- On the **client profile** under **Payments**
- **Billing** → **Payments**
- In **Pay invoice** → **Existing payment** when paying a finalized invoice

Unallocated payments can be applied to one or more invoices at any time.

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## Using unallocated payments
Unallocated payments can be manually applied to invoices.\
See [Apply an existing payment to an invoice](https://support.caspen.com/billing/payments/apply-an-existing-payment-to-an-invoice) for details.

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## Important distinction
Unallocated payments are _not_ the same as credit notes.

- **Unallocated payments** = money you have received but have not yet applied to an invoice.
- **Credit notes** = adjustments that reduce or correct an invoice total. See [Add a credit note](https://support.caspen.com/billing/payments/add-a-credit-note).

Keeping these separate ensures clear financial records and accurate reporting.

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## Need help?

We’re here to make billing simple. If you have questions, we’re always happy to assist.\
Reach out to our support team in Caspen by going to **Support** → **Contact support**, then send us a message.