Automatically Reduce Invoice Balance
When returning merchandise on an invoice that was charged on account and the invoice remains outstanding at the time of the return, you have the option to automatically reduce the original invoice balance by the amount of the return by selecting the option to Automatically Reduce Invoice Balance in Merchandise Return.
Note: If the items being returned were sold on multiple invoices, do NOT select this option as the returned amount of one item may not reduce the invoice balance of the invoice it was originally charged on. The amount may be deducted from an entirely different invoice.
If this option is not selected and the items returned were sold on an invoice that was charged on account, on the 'Return Payments' window you must choose to create a credit invoice. The credit must then be applied to the outstanding invoice in 'O/A Payment' on the Daily Posting menu. Refer to 'Applying a Credit Invoice to an Outstanding Invoice' for more information.