Close the customer open credit with a debit memo

1. Go to AR, Transactions, Debit Memos.
2. Select the customer.
3. Enter the date.
4. Select to Apply to Open credits.
5. Enter the full amount of the open credit.
6. Keep the default distribution as Sales Adjustments.
7. Post the debit memo.

Post a credit memo to record the amount as customer deposits

1. Go to AR, Transactions, Credit Memos.
2. Select the Customer ID.
3. Enter the date.
4. Select to Apply to Deposits.
5. Enter the full open credit amount from above as a deposit.
6. Keep the default distribution as Sales Adjustments.
7. Post the credit memo.

Apply the Deposit to the Sales Order

1. Go to OE, Orders, Maintain Sales Orders.
2. Select the customer and sales order.
3. Select Summary.
4. Go to the Deposits to be applied section, then select Deposits.
5. Find the open deposit you posted above.
6. In Apply, enter the amount of the deposit to apply to this sales order, then click OK.
7. Click OK and Save.