## Zoho Inventory Documentation Index

Access the complete documentation index at:
https://www.zoho.com/us/inventory/llms.txt

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# I received payment for an order, but haven’t yet shipped the consignments. Now my customer wants to cancel a few items from it. How can I do that?

When an order has only been paid for but not shipped, then you only need to provide credits or refund for the canceled shipment.

### Step 1: Create a credit note for the invoice

*   Navigate to the **Invoices** module.
*   Open the specific invoice. **Note:** The invoice must be in ‘Paid’ state.
*   Click on the **More** button.
*   Select the **Create Credit Note** option.
*   Retain the items you want to cancel and remove the others from the list by clicking on the (x) button at the end of each row. The items will be indicated as ‘Canceled Item’. You will not be able to process these items further in the sales order.
*   Click on **Save as Open** to create a credit note for that invoice.

### Step 2: Record a refund or apply credits to future invoices

Once you create a credit note, you can either record a refund, or apply the credits to your customer’s future purchases.

To record a refund:

*   Navigate to the **Returns** module.
*   Select **Credit Notes**.
*   Open the relevant credit note.
*   Click on **More > Refund**.
*   Enter the refund amount and select the expense account.
*   Click **Save** to record the refund.

To apply credits to invoices:

*   Open the relevant credit note.
*   Click on the **Apply to Invoice** button.
*   Distribute the credit balance against each invoice.
*   Click **Save** to apply the credits. The applied credit will be deducted from the total invoice amount.

**Insight:** A credit note created for a customer can only be applied to the invoices of the same customer.

You can pack and ship the remaining items from your sales order.