To apply a customer's credit towards an invoice, navigate to "Finances>Payments".
Next, click the "Add Payment" button.
Select the customer. If the customer has an outstanding invoice, you will see it in the "Apply to" dropdown.
Enter the amount you want to be paid towards the invoice and select "Customer credit balance" as the payment method.
Then click the "Add Payment" button.
After clicking "Add Payment", you will see a prompt to confirm:
After clicking "Yes", the customer's credit will be applied to the invoice.