If you have invoices on Square that are paid in instalments across multiple days, Link My Books uses a Split Payment ledger entry to keep the bank deposits balanced across the days each instalment lands. Normally this account briefly holds the unpaid balance of a partially-paid invoice and returns to zero once the invoice is fully settled.

In one specific scenario the Split Payment account can carry a permanent negative balance. This article explains why, what it means for your books, and the options you have if you'd like to clear it.

When a Square invoice is paid in two parts on different days, Link My Books splits the order across both days so each day's payout matches the bank deposit you actually received. Here's how it looks for a $100 invoice paid $50 on Day 1 and the remaining $50 on Day 2:

Day 1 payout (deposit = $50):

Day 2 payout (deposit = $50):

Across both days the full $100 of revenue is recorded, the bank receives $100 in total, and the Split Payment account starts at $0, briefly carries the outstanding balance, and returns to $0 once the invoice is fully paid.

The Split Payment account can show a permanent negative balance in one specific situation: an invoice that was issued and partially paid before your Link My Books history start date, with the remaining balance paid after your history start date.

For example:

When the May payment lands, Link My Books correctly releases $14.50 from the Split Payment account so the bank deposit reconciles. But because the original January invoice and its first payment fell before your history start date, Link My Books never recorded them — so there's nothing in the Split Payment account to offset the release. The account ends up at -$14.50.

The negative balance represents real money that landed in your bank account, paid against an invoice that existed before Link My Books started tracking your sales. The money itself is correctly recorded in your bank — it's just that the Split Payment account doesn't have an offsetting entry, because the original sale isn't in Link My Books' world.

The Split Payment account will carry a residual negative figure equal to the total of all pre-history split tender balances you've collected since your history start date. Once those have all been collected, no further negative entries will be added.

That's up to you. There are three reasonable approaches.

If the amount is small and you're comfortable with a residual figure sitting on your balance sheet, you don't have to do anything. The Split Payment line will simply carry the historical balance.

If you (or your previous bookkeeper) already recorded the pre-history invoice in your books — for example, the January invoice was on your books before you connected Link My Books and you tracked its outstanding balance in your own AR or debtors account — you can post a manual journal:

This closes out both the negative balance on Split Payment and the outstanding receivable on the original invoice.

If the original pre-history invoice was never recorded in your books, the negative balance represents revenue earned in a prior period but received in the current period. You can post a manual journal:

The negative balance described in this article relates only to invoices that straddle your history start date. If you're still seeing the negative balance grow long after your history start date has passed, or if the figure looks larger than you'd expect given your invoice history, please get in touch via the blue chat icon or at [email protected]. That can sometimes indicate something different is going on, and we'd want to take a look.