How do i allocate a credit note to an invoice and receive the difference as a refund?

Hello there, e-jeffs-skytrain. I'm glad to walk you through adding a credit memo to an invoice and recording a refund in QuickBooks Online (QBO).

The first thing that we'll need to do is to turn off the Automatic apply credits so that you'll have the option to select where to apply the said credit.

Here's how:

1. Go to the Gear icon ⚙︎, then click Account and settings.
2. Choose the Advanced tab. Then, select Edit ✎ in the Automation section.
3. Turn off the Automatically apply credits. Then, hit Save, and then Done.

Next, let's create a credit memo.

1. Click + New, then select Credit memo.
2. In the Customer dropdown, choose the customer's name.
3. Enter the accurate credit memo details, such as the date and the amount. 
4. Once done, hit Save and close.

After this, you'll need to issue a check amounting to $130.13 affecting your A/R for the refund. Refer to the steps below.

1. Click + New, then select Check.
2. Fill out the necessary information including the amount "130.13".
3. Once done, click Save and close.

Then, link the credit memo to the invoice using Receive payment.

1. Click + New. Then, click Receive payment.
2. In the Customer dropdown, select the customer.
3. In the Outstanding Transactions section, select the open invoice you want to apply the credit memo to.
4. In the Credits section, select the credit memos you want to apply.
5. For the open invoice in the Payment column, enter how much of the credit you want to apply.
6. Leave the Payment method, Reference no, Deposit to, and Amount received fields blank.
7. Accordingly fill out the rest of the form, including the Payment date.
8. Make sure the total is correct after applying the credit memo. Then, hit Save and close.

In addition, you may also review this article to help you track and record your business income and expenses in QBO: Enter and manage bills and bill payments in QuickBooks Online.

Don't hesitate to reply to this thread if you have additional questions regarding your invoices in QuickBooks. The Community space is open 24/7 to help you.