diff --git a/packages/server/src/api/controllers/Purchases/BillsPayments.ts b/packages/server/src/api/controllers/Purchases/BillsPayments.ts
index dfe46cf4d..2bfb38383 100644
--- a/packages/server/src/api/controllers/Purchases/BillsPayments.ts
+++ b/packages/server/src/api/controllers/Purchases/BillsPayments.ts
@@ -118,7 +118,7 @@ export default class BillsPayments extends BaseController {
       check('reference').optional().trim().escape(),
       check('branch_id').optional({ nullable: true }).isNumeric().toInt(),
 
-      check('entries').exists().isArray({ min: 1 }),
+      check('entries').exists().isArray(),
       check('entries.*.index').optional().isNumeric().toInt(),
       check('entries.*.bill_id').exists().isNumeric().toInt(),
       check('entries.*.payment_amount').exists().isNumeric().toFloat(),
diff --git a/packages/server/src/api/controllers/Sales/PaymentReceives.ts b/packages/server/src/api/controllers/Sales/PaymentReceives.ts
index 4181b2fe7..263652e77 100644
--- a/packages/server/src/api/controllers/Sales/PaymentReceives.ts
+++ b/packages/server/src/api/controllers/Sales/PaymentReceives.ts
@@ -165,7 +165,7 @@ export default class PaymentReceivesController extends BaseController {
       check('entries.*.id').optional({ nullable: true }).isNumeric().toInt(),
       check('entries.*.index').optional().isNumeric().toInt(),
       check('entries.*.invoice_id').exists().isNumeric().toInt(),
-      check('entries.*.amount_applied').exists().isNumeric().toFloat(),
+      check('entries.*.payment_amount').exists().isNumeric().toFloat(),
 
       check('attachments').isArray().optional(),
       check('attachments.*.key').exists().isString(),
diff --git a/packages/server/src/database/migrations/20240723231630_amount_applied_column_to_payments_made_table.js b/packages/server/src/database/migrations/20240723231630_amount_applied_column_to_payments_made_table.js
new file mode 100644
index 000000000..d88e14fff
--- /dev/null
+++ b/packages/server/src/database/migrations/20240723231630_amount_applied_column_to_payments_made_table.js
@@ -0,0 +1,17 @@
+exports.up = function (knex) {
+  return knex.schema.table('bills_payments', (table) => {
+    table.decimal('applied_amount', 13, 3).defaultTo(0);
+    table
+      .integer('prepard_expenses_account_id')
+      .unsigned()
+      .references('id')
+      .inTable('accounts');
+  });
+};
+
+exports.down = function (knex) {
+  return knex.schema.table('bills_payments', (table) => {
+    table.dropColumn('applied_amount');
+    table.dropColumn('prepard_expenses_account_id');
+  });
+};
diff --git a/packages/server/src/interfaces/Bill.ts b/packages/server/src/interfaces/Bill.ts
index 0ccc72723..d3379956c 100644
--- a/packages/server/src/interfaces/Bill.ts
+++ b/packages/server/src/interfaces/Bill.ts
@@ -166,3 +166,10 @@ export interface IBillOpenedPayload {
   oldBill: IBill;
   tenantId: number;
 }
+
+
+export interface IBillPrepardExpensesAppliedEventPayload {
+  tenantId: number;
+  billId: number;
+  trx?: Knex.Transaction;
+}
diff --git a/packages/server/src/interfaces/BillPayment.ts b/packages/server/src/interfaces/BillPayment.ts
index 002bf867b..2a8e37626 100644
--- a/packages/server/src/interfaces/BillPayment.ts
+++ b/packages/server/src/interfaces/BillPayment.ts
@@ -119,3 +119,11 @@ export enum IPaymentMadeAction {
   Delete = 'Delete',
   View = 'View',
 }
+
+export interface IPaymentPrepardExpensesAppliedEventPayload {
+  tenantId: number;
+  billPaymentId: number;
+  billId: number;
+  appliedAmount: number;
+  trx?: Knex.Transaction;
+}
diff --git a/packages/server/src/interfaces/PaymentReceive.ts b/packages/server/src/interfaces/PaymentReceive.ts
index dc35c03e4..1aac795b8 100644
--- a/packages/server/src/interfaces/PaymentReceive.ts
+++ b/packages/server/src/interfaces/PaymentReceive.ts
@@ -72,7 +72,7 @@ export interface IPaymentReceiveEntryDTO {
   index: number;
   paymentReceiveId: number;
   invoiceId: number;
-  amountApplied: number;
+  paymentAmount: number;
 }
 
 export interface IPaymentReceivesFilter extends IDynamicListFilterDTO {
diff --git a/packages/server/src/models/Bill.ts b/packages/server/src/models/Bill.ts
index 422865cb0..e91f0ea33 100644
--- a/packages/server/src/models/Bill.ts
+++ b/packages/server/src/models/Bill.ts
@@ -525,9 +525,9 @@ export default class Bill extends mixin(TenantModel, [
     return notFoundBillsIds;
   }
 
-  static changePaymentAmount(billId, amount) {
+  static changePaymentAmount(billId, amount, trx) {
     const changeMethod = amount > 0 ? 'increment' : 'decrement';
-    return this.query()
+    return this.query(trx)
       .where('id', billId)
       [changeMethod]('payment_amount', Math.abs(amount));
   }
diff --git a/packages/server/src/services/Contacts/ContactTransformer.ts b/packages/server/src/services/Contacts/ContactTransformer.ts
index ceaeeec6c..abf6ec0b5 100644
--- a/packages/server/src/services/Contacts/ContactTransformer.ts
+++ b/packages/server/src/services/Contacts/ContactTransformer.ts
@@ -38,4 +38,24 @@ export default class ContactTransfromer extends Transformer {
       ? this.formatDate(contact.openingBalanceAt)
       : '';
   };
+
+  /**
+   * Retrieves the unused credit balance.
+   * @param {IContact} contact
+   * @returns {number}
+   */
+  protected unusedCredit = (contact: IContact): number => {
+    return contact.balance > 0 ? 0 : Math.abs(contact.balance);
+  };
+
+  /**
+   * Retrieves the formatted unused credit balance.
+   * @param {IContact} contact
+   * @returns {string}
+   */
+  protected formattedUnusedCredit = (contact: IContact): string => {
+    const unusedCredit = this.unusedCredit(contact);
+
+    return formatNumber(unusedCredit, { currencyCode: contact.currencyCode });
+  };
 }
diff --git a/packages/server/src/services/Contacts/Customers/CustomerTransformer.ts b/packages/server/src/services/Contacts/Customers/CustomerTransformer.ts
index 497430c0e..98ee39c42 100644
--- a/packages/server/src/services/Contacts/Customers/CustomerTransformer.ts
+++ b/packages/server/src/services/Contacts/Customers/CustomerTransformer.ts
@@ -12,6 +12,8 @@ export default class CustomerTransfromer extends ContactTransfromer {
       'formattedOpeningBalanceAt',
       'customerType',
       'formattedCustomerType',
+      'unusedCredit',
+      'formattedUnusedCredit',
     ];
   };
 
diff --git a/packages/server/src/services/Contacts/Customers/CustomersApplication.ts b/packages/server/src/services/Contacts/Customers/CustomersApplication.ts
index 3cf222c02..ac3b1dd3b 100644
--- a/packages/server/src/services/Contacts/Customers/CustomersApplication.ts
+++ b/packages/server/src/services/Contacts/Customers/CustomersApplication.ts
@@ -45,9 +45,9 @@ export class CustomersApplication {
 
   /**
    * Creates a new customer.
-   * @param   {number} tenantId
-   * @param   {ICustomerNewDTO} customerDTO
-   * @param   {ISystemUser} authorizedUser
+   * @param  {number} tenantId
+   * @param {ICustomerNewDTO} customerDTO
+   * @param {ISystemUser} authorizedUser
    * @returns {Promise<ICustomer>}
    */
   public createCustomer = (tenantId: number, customerDTO: ICustomerNewDTO) => {
@@ -56,9 +56,9 @@ export class CustomersApplication {
 
   /**
    * Edits details of the given customer.
-   * @param  {number} tenantId
-   * @param  {number} customerId
-   * @param  {ICustomerEditDTO} customerDTO
+   * @param {number} tenantId
+   * @param {number} customerId
+   * @param {ICustomerEditDTO} customerDTO
    * @return {Promise<ICustomer>}
    */
   public editCustomer = (
@@ -75,9 +75,9 @@ export class CustomersApplication {
 
   /**
    * Deletes the given customer and associated transactions.
-   * @param   {number} tenantId
-   * @param   {number} customerId
-   * @param   {ISystemUser} authorizedUser
+   * @param {number} tenantId
+   * @param {number} customerId
+   * @param {ISystemUser} authorizedUser
    * @returns {Promise<void>}
    */
   public deleteCustomer = (
@@ -94,9 +94,9 @@ export class CustomersApplication {
 
   /**
    * Changes the opening balance of the given customer.
-   * @param   {number} tenantId
-   * @param   {number} customerId
-   * @param   {Date|string} openingBalanceEditDTO
+   * @param {number} tenantId
+   * @param {number} customerId
+   * @param {Date|string} openingBalanceEditDTO
    * @returns {Promise<ICustomer>}
    */
   public editOpeningBalance = (
diff --git a/packages/server/src/services/Contacts/Vendors/VendorTransformer.ts b/packages/server/src/services/Contacts/Vendors/VendorTransformer.ts
index 0514392a8..7970befea 100644
--- a/packages/server/src/services/Contacts/Vendors/VendorTransformer.ts
+++ b/packages/server/src/services/Contacts/Vendors/VendorTransformer.ts
@@ -1,4 +1,3 @@
-import { Service } from 'typedi';
 import ContactTransfromer from '../ContactTransformer';
 
 export default class VendorTransfromer extends ContactTransfromer {
@@ -10,7 +9,9 @@ export default class VendorTransfromer extends ContactTransfromer {
     return [
       'formattedBalance',
       'formattedOpeningBalance',
-      'formattedOpeningBalanceAt'
+      'formattedOpeningBalanceAt',
+      'unusedCredit',
+      'formattedUnusedCredit',
     ];
   };
 }
diff --git a/packages/server/src/services/Contacts/constants.ts b/packages/server/src/services/Contacts/constants.ts
index 3bfb8771e..5e18f9f9a 100644
--- a/packages/server/src/services/Contacts/constants.ts
+++ b/packages/server/src/services/Contacts/constants.ts
@@ -21,7 +21,6 @@ export const DEFAULT_VIEWS = [
   },
 ];
 
-
 export const ERRORS = {
   OPENING_BALANCE_DATE_REQUIRED: 'OPENING_BALANCE_DATE_REQUIRED',
   CONTACT_ALREADY_INACTIVE: 'CONTACT_ALREADY_INACTIVE',
diff --git a/packages/server/src/services/Purchases/Bills/AutoApplyPrepardExpenses.ts b/packages/server/src/services/Purchases/Bills/AutoApplyPrepardExpenses.ts
index 88f3a0c4c..632d6dbd4 100644
--- a/packages/server/src/services/Purchases/Bills/AutoApplyPrepardExpenses.ts
+++ b/packages/server/src/services/Purchases/Bills/AutoApplyPrepardExpenses.ts
@@ -1,13 +1,23 @@
 import { Knex } from 'knex';
-import HasTenancyService from '@/services/Tenancy/TenancyService';
-import PromisePool from '@supercharge/promise-pool';
 import { Inject, Service } from 'typedi';
+import PromisePool, { ProcessHandler } from '@supercharge/promise-pool';
+import HasTenancyService from '@/services/Tenancy/TenancyService';
+import {
+  IBillPayment,
+  IBillPrepardExpensesAppliedEventPayload,
+  IPaymentPrepardExpensesAppliedEventPayload,
+} from '@/interfaces';
+import { EventPublisher } from '@/lib/EventPublisher/EventPublisher';
+import events from '@/subscribers/events';
 
 @Service()
 export class AutoApplyPrepardExpenses {
   @Inject()
   private tenancy: HasTenancyService;
 
+  @Inject()
+  private eventPublisher: EventPublisher;
+
   /**
    * Auto apply prepard expenses to the given bill.
    * @param {number} tenantId
@@ -19,31 +29,53 @@ export class AutoApplyPrepardExpenses {
     billId: number,
     trx?: Knex.Transaction
   ): Promise<void> {
-    const { PaymentMade, Bill } = this.tenancy.models(tenantId);
+    const { BillPayment, Bill } = this.tenancy.models(tenantId);
 
-    const unappliedPayments = await PaymentMade.query(trx).where(
-      'unappliedAmount',
-      '>',
-      0
-    );
-    const bill = Bill.query(trx).findById(billId).throwIfNotFound();
+    const bill = await Bill.query(trx).findById(billId).throwIfNotFound();
 
+    const unappliedPayments = await BillPayment.query(trx)
+      .where('vendorId', bill.vendorId)
+      .whereRaw('amount - applied_amount > 0')
+      .whereNotNull('prepardExpensesAccountId');
+
+    let unappliedAmount = bill.total;
+    let appliedTotalAmount = 0; // Total applied amount after applying.
+
+    const precessHandler: ProcessHandler<IBillPayment, void> = async (
+      unappliedPayment: IBillPayment,
+      index: number,
+      pool
+    ) => {
+      const appliedAmount = Math.min(unappliedAmount, unappliedPayment.amount);
+      unappliedAmount = unappliedAmount - appliedAmount;
+      appliedTotalAmount += appliedAmount;
+
+      // Stop applying once the unapplied amount reach zero or less.
+      if (appliedAmount <= 0) {
+        pool.stop();
+        return;
+      }
+      await this.applyBillToPaymentMade(
+        tenantId,
+        unappliedPayment.id,
+        bill.id,
+        appliedAmount,
+        trx
+      );
+    };
     await PromisePool.withConcurrency(1)
       .for(unappliedPayments)
-      .process(async (unappliedPayment: any) => {
-        const appliedAmount = 1;
-
-        await this.applyBillToPaymentMade(
-          tenantId,
-          unappliedPayment.id,
-          bill.id,
-          appliedAmount,
-          trx
-        );
-      });
+      .process(precessHandler);
 
     // Increase the paid amount of the purchase invoice.
-    await Bill.changePaymentAmount(billId, 0, trx);
+    await Bill.changePaymentAmount(billId, appliedTotalAmount, trx);
+
+    // Triggers `onBillPrepardExpensesApplied` event.
+    await this.eventPublisher.emitAsync(events.bill.onPrepardExpensesApplied, {
+      tenantId,
+      billId,
+      trx,
+    } as IBillPrepardExpensesAppliedEventPayload);
   }
 
   /**
@@ -68,6 +100,18 @@ export class AutoApplyPrepardExpenses {
       billId,
       paymentAmount: appliedAmount,
     });
-    await BillPayment.query().increment('usedAmount', appliedAmount);
+    await BillPayment.query(trx).increment('appliedAmount', appliedAmount);
+
+    // Triggers `onBillPaymentPrepardExpensesApplied` event.
+    await this.eventPublisher.emitAsync(
+      events.billPayment.onPrepardExpensesApplied,
+      {
+        tenantId,
+        billPaymentId,
+        billId,
+        appliedAmount,
+        trx,
+      } as IPaymentPrepardExpensesAppliedEventPayload
+    );
   };
 }
diff --git a/packages/server/src/services/Sales/PaymentReceives/CreatePaymentReceive.ts b/packages/server/src/services/Sales/PaymentReceives/CreatePaymentReceive.ts
index da2d9785f..7649177d3 100644
--- a/packages/server/src/services/Sales/PaymentReceives/CreatePaymentReceive.ts
+++ b/packages/server/src/services/Sales/PaymentReceives/CreatePaymentReceive.ts
@@ -78,10 +78,10 @@ export class CreatePaymentReceive {
       paymentReceiveDTO.entries
     );
     // Validate invoice payment amount.
-    // await this.validators.validateInvoicesPaymentsAmount(
-    //   tenantId,
-    //   paymentReceiveDTO.entries
-    // );
+    await this.validators.validateInvoicesPaymentsAmount(
+      tenantId,
+      paymentReceiveDTO.entries
+    );
     // Validates the payment account currency code.
     this.validators.validatePaymentAccountCurrency(
       depositAccount.currencyCode,
diff --git a/packages/server/src/subscribers/events.ts b/packages/server/src/subscribers/events.ts
index 164fb4df0..70e99f63c 100644
--- a/packages/server/src/subscribers/events.ts
+++ b/packages/server/src/subscribers/events.ts
@@ -254,6 +254,8 @@ export default {
 
     onOpening: 'onBillOpening',
     onOpened: 'onBillOpened',
+
+    onPrepardExpensesApplied: 'onBillPrepardExpensesApplied'
   },
 
   /**
@@ -271,6 +273,8 @@ export default {
 
     onPublishing: 'onBillPaymentPublishing',
     onPublished: 'onBillPaymentPublished',
+
+    onPrepardExpensesApplied: 'onBillPaymentPrepardExpensesApplied'
   },
 
   /**
diff --git a/packages/webapp/src/containers/Customers/CustomersLanding/components.tsx b/packages/webapp/src/containers/Customers/CustomersLanding/components.tsx
index 0de0a69b5..9e91344a3 100644
--- a/packages/webapp/src/containers/Customers/CustomersLanding/components.tsx
+++ b/packages/webapp/src/containers/Customers/CustomersLanding/components.tsx
@@ -160,6 +160,13 @@ export function useCustomersTableColumns() {
         width: 85,
         clickable: true,
       },
+      {
+        id: 'credit_balance',
+        Header: 'Credit Balance',
+        accessor: 'formatted_unused_credit',
+        width: 100,
+        align: 'right',
+      },
       {
         id: 'balance',
         Header: intl.get('receivable_balance'),
diff --git a/packages/webapp/src/containers/Vendors/VendorsLanding/components.tsx b/packages/webapp/src/containers/Vendors/VendorsLanding/components.tsx
index c6eb396e6..2a12660c5 100644
--- a/packages/webapp/src/containers/Vendors/VendorsLanding/components.tsx
+++ b/packages/webapp/src/containers/Vendors/VendorsLanding/components.tsx
@@ -183,6 +183,13 @@ export function useVendorsTableColumns() {
         width: 85,
         clickable: true,
       },
+      {
+        id: 'credit_balance',
+        Header: 'Credit Balance',
+        accessor: 'formatted_unused_credit',
+        width: 100,
+        align: 'right',
+      },
       {
         id: 'balance',
         Header: intl.get('receivable_balance'),