Accounts Receivable lets you issue an advance credit for goods that a customer has returned, but which you have not yet received.
When the customer pays the invoice, they reduce their payment by the amount agreed for the returned goods. You then enter a receipt in Accounts Receivable both for the customer's payment and for advance credit on the returned goods.
The advance credit offsets the full amount of the invoice, which appears on the customer's next statement as fully paid. However because you have actually received neither a payment nor the goods—it also restores the customer's outstanding balance for the unpaid portion of the invoice.
The advance credit amount appears as a debit on the customer's statement, where it remains until you receive the returned goods.
When you receive the goods, you enter the real credit note, offsetting the advance credit in the customer's account (and on the customer's statement), and reducing sales.
If you are processing a receipt for a national account, Accounts Receivable lets you choose whether to apply the advance credit to the national account or a member customer.