How do I change an invoice to a credit note?

I'm here to share some information about how credit notes and invoices work in QBO, nicky6.

The option to convert an invoice to a credit note is unavailable in QuickBooks Online. We can manually create the credit note then enter the information based on the invoice. I recommend taking a screenshot of the invoice for reference.

Here's how to create a credit note:

1. Click the + New button.
2. Select Credit Note.
3. Enter the necessary information.
4. Hit Save and close.

You can refer to this link in applying the credit notes: Enter and apply credit notes and delayed credits in QuickBooks Online.

If you intend to give the customer a credit for their overpayment, you can turn on the Automatically apply credits option in the Account and Settings. This forces the program to create credits if your customers overpay you. 
 

You can follow the steps below in turning it on:

1. Click the Gear icon.
2. Select Account and Settings.
3. Choose the Advanced tab.
4. Under the Automation section, click the Pencil icon.
5. Tick the Automatically apply credits option.
6. Hit Save.

I also encourage you to read this article about creating customer statements to show your customers the summary of their invoices, payments, credits, and balances.

I'm always here to help if you have any other QuickBooks-related concerns and questions. Feel free to tag my name in the comment section.