Yes, you can continue using the deduction item, C_Geil. I'll further discuss why you encounter the message when adding the item to an invoice.

In QuickBooks Desktop, deduction items are linked to an expense account and added to an invoice using a negative amount to subtract payments accordingly. The alert you see, "This item is associated with an expense account. Do you want to continue?" is a reminder about this connection. This is standard behavior, so you can safely proceed without creating a new item.

Moreover, consider scanning this material for guidance when linking customer payments to their invoices: Record an invoice payment.

Please continue to update us in this thread if you have other inquiries about deduction items on sales transactions in QuickBooks Desktop. We're always around to help.