Summary
Two things cause Payments to show as a credit, enabling [x] Automatically apply positive credit balance, or the customer has an existing positive balance.
Key Points
In Settings/Invoices, [X] Automatically apply positive credit balance is enabled
Or, the customer has an existing positive balance
To eliminate the credit, remove the check mark in Settings/Invoices
Edit the payment with either Option A or Option B below
The positive balance is applied to new invoices (only for auto-created). That is why customers are showing payments as a credit.
To resolve this:
Remove the check mark in [ ] Automatically apply positive credit balance
When you remove the check mark, moving forward you need to do Option A or Option B below.
The scenario is: A customer pays $100 on a $50 invoice leaving a credit of $50. Now that the setting Automatically apply positive credit balance is off, after the next $50 service is completed, do either:
Option A: Edit the original $100 payment and click Distribute Payment so it will pay the new invoice with the original $100.
OR
Option B: Pay the new invoice with the Pre-Paid Credit of $50.00. This is the Credit payment method that appears in the Payment window. If you don't want to see Credit in the Payment window, go with Option A.