If a customer is set to allow sales on account, you will be able to select the option for Store Charge/Credit on the payment screen during a sale. You can also select that payment type to give them store credit for returned merchandise.

When checking the Accounts Receivable list, sales that have an outstanding balance will appear as a positive number in the Balance column, and credits will appear as a negative number.

To settle their account, go to Activities > Receive Payments, and enter the customer name. Initially, this screen will show only their sales that have an outstanding balance, and allow you to apply a new payment to those balances. If the selected customer has one or more active credits, the Apply Credits radio button will become active, and the amount of credit available will appear in the window's title bar. When you select Apply Credits, if the available credit is more than the total balance due, the balance will be filled in to the Amount field. If the available credit is less than the total balance, then the amount of credit will be filled in.

At this point, you can highlight an individual sale and enter an amount into the Payment box to apply payments manually to specific sales, or you can click F2-Auto Apply to have the system automatically apply the amount to the sales, clearing the oldest sales first. After auto-applying, you can alter the payment on individual sales by highlighting a sale and entering a lower amount to remove some of the applied amount, then add that amount to a different sale, if desired.

After applying credits, the Accounts Receivable list will be updated so only those invoices that still have a balance or credit outstanding are shown.