How to allocate credit on account to pay off an invoice

Go to the Customer section at the top of the dashboard.

Search and select the customer you are looking for. 

Click on the Financial sub menu and then click on Allocate payment. 

Select the unallocated credits from the top half of the page and tick the payments to apply the credit to in the second half of the page. Then click Allocate payment transactions.

You will then be notified that the payments have been allocated.