1. Create a credit memo
2. Apply the credit memo to the invoice.
- From Accounts Receivable, click Open, Receipts folder, and click Invoice Receipt.
- In the Receipt Not Saved screen, select the customer.
- Enter the amount of the outstanding invoice to apply.
- Enter the amount of the credit memo to apply. The Payment Total, Applied Total, and Balance at the bottom of the screen should be all zeros.
- Click Receipt at the top of the screen and click Post.
- Click Yes, to post and apply the credit memo to the invoice.
- Click OK.
- Highlight the zero receipt and click Deposit.
- Click Yes to deposit the receipt.
- Click Yes to confirm you want to deposit the zero receipt.