I'll clarify the process of issuing customer refunds in QuickBooks Online (QBO) using a credit memo, @KalRe.

In QBO, you need to create a credit memo if your customer wants to use it to reduce the balance on their next invoice.

Yes, you're right. The negative amount indicates that the balance has been paid and a refund was issued. You may leave it as is if your customer wants to apply this credit to future invoices. Otherwise, please refer to the steps below on how to zero out the balance on your customer's account:

1. Go to + New and select Expense.
2. Select the customer's name in the Payee field.
3. Choose the bank account in the Payment Account field.
4. If you haven't yet, create a Debtors (Accounts Receivable) account and select in the Category column.
5. Enter the Amount and click Save.
6. Go to + New and select Receive Payment.
7. Select the Customer. The balance should be zero since they will cancel each other out.
8. Click Save and Close.

For a detailed step-by-step guide, refer to Step 2: Make the refund in the Customer Refund if the invoice has been paid section in this article: Record a customer refund in QuickBooks Online.

Furthermore, here's a guide to help you handle your customers' outstanding balances in QBO: Manage outstanding balances for customers and vendors in QuickBooks Online.

If you have other clarifications about customer refunds, please don't hesitate to reach out back to us. We'll be glad to explain further. Stay safe.