Explain the distinction between the “Residual payment” and “Partial payment” strategies for distributing funds in accounts receivable.

Among the differences between a partial payment and the residual payment are:

Partial Payment 

Suppose invoice A456 is issued for $200, and the buyer pays $140. After deducting the partial payment from the invoice, a balance of $60 is left.

Residual Payment 

During the time that the customer is receiving residual payments, invoice number A456 is paid in full, clearing the way for the production of a new financial statement that accounts for the outstanding amount of $60.