The Credit Invoice option can be used to quickly create a credit memo for all or some portion of the selected invoice. The Credit Invoice option directly creates a credit memo for the selected invoice and it does not require an RA or any other records to be created or processed.
The option allows you to quickly create credits that are not associated with customer returns situations.
Your ability to cancel an invoice is controlled by a system parameter F248:ARINVCRD. If this parameter is set to Y, you may credit an invoice. If the parameter is set to N or it is blank or missing, you may not credit an invoice in the program.
When the Credit Invoice option is selected, the system checks to see what credits have already been issued against the selected invoice. If credits have been issed against the invoice, the system displays the total credits that have been issued. If credits for more than the invoice total have already been issued against the invoice, the system notifies you of that fact, and it blocks you from creating another credit for the invoice from the Lookup.
If the invoice is valid and it has not already been fully credited, the system then creates a negative sales order and it loads the sales order into the Order Invoicing program. The Order Invoicing program can then be used to edit the credit memo information and to add any addiitional information (such as comments or images) prior to saving the new credite.
The following link provides more information about the Credit Invoice option.