Can you not create a credit note directly from an debtor's invoice?

Hello there, Elmie.

I'll lend you a hand on this query. Let's go through the complete process of applying a credit note to an invoice.

First, you need to create a credit note transaction. 

Here's how:

1. Click the New + menu.
2. Select Credit note.
3. Fill out the form.
4. Tap Save and close.

When you need to apply the credit note, follow these steps:

1. Go to the New + menu.
2. Select Receive payment.
3. Fill out the necessary fields.
4. Under the Credits section, put a check on the credit note you want to apply.
5. Ensure the total amount is correct after applying the credit note.
6. Select Save and close.
    

QBO is initially set to automatically apply credits to your invoices. If you need to manually assign credit notes to specific invoices, you'll need to turn this setting off.

Here's how:
 

1. Click the Gear icon.
2. Select Account and Settings.
3. Press the Advanced tab.
4. Search for the Automation section, and tap it.
5. Remove the checkmark on the Automatically apply credits box.
6. Hit Save, then Done.

You can check out this article for more information: Create and apply credit notes or delayed credits.

On the other hand, you can take a look at this article that provides the steps on how you can record supplier refunds. It also includes the steps on how to apply for supplier credits: How do I handle supplier credits and refunds?

QuickBooks will have your back for any questions that you may have in the future. Don't hesitate to let us know. Have a great day,