How to Handle Credit Memos for Sales Returns with Partial Payments and Refunds

Explanation of handling the credit memo when a sales return is made and the customer has not paid the full amount of the original invoice:

If the customer has not paid the full invoice, follow these steps:

1. Refund the amount paid:

   • Process a “refund” transaction for the amount paid by the customer that you want to return to them through the refund icon against the credit memo.

2. Allocate the credit memo:

   • Then, allocate the credit memo to the remaining unpaid amount of the original invoice.