@W012
Yeah, I agree that your solution is clean and simple. You're not missing anything.
The other option is to create a quick journal entry (JE): debit A/R for the customer and credit Sales Returns & Allowances. That prevents you from having to set up a new A/R Payment Adjustment service item. I try to avoid JEs whenever possible, but having to set up a service item for most likely one-time use is an exception.
I'm sure you know this, but don't forget to apply the outstanding credit to the A/R balance created by the invoice/JE to close it.
