Does BytePhase mark an invoice as paid when a customer pays by UPI link?

No. A UPI payment link sends money straight from the customer’s UPI app to your UPI ID, with no payment gateway in between, so BytePhase does not receive a payment confirmation. Once you see the money in your bank or UPI app, record the payment against the invoice or job in BytePhase. If you want payment requests tracked inside BytePhase, look at the PhonePe integration instead.