How to group by month using SQL Server?

SELECT CONVERT(NVARCHAR(10), PaymentDate, 120) [Month], SUM(Amount) [TotalAmount]
FROM Payments
GROUP BY CONVERT(NVARCHAR(10), PaymentDate, 120)
ORDER BY [Month]

You could also try:

SELECT DATEPART(Year, PaymentDate) Year, DATEPART(Month, PaymentDate) Month, SUM(Amount) [TotalAmount]
FROM Payments
GROUP BY DATEPART(Year, PaymentDate), DATEPART(Month, PaymentDate)
ORDER BY Year, Month