How to apply customer deposit or credits to invoices?

In Versa. A deposit can be collected before you ship and usually collected as a payment on a sales order. Or you can record prepayment using a paid invoice. The deposit/credit is held in an account called Customer Deposits (It might be renamed to something else in your system. Look for an account with the subtype of customer deposits).
Deposit can be applied when posting shipment for a prepaid sales order to a customer.
On the +New Shipment page when Post Shipment there is a checkbox to select -> Apply Deposit to Posted Invoice from a Prepaid Sales Order. The apply deposit option can only be checked is the Post Invoice After Saving option is selected.
Another way to apply the deposit to an invoice is on the Receive Payment page (Invoices menu -> Receive Payment).
Steps:
Choose APPLY DEPOSIT from Receive To Account list
Choose currency
Choose customer (only customer with a deposit balance is listed)
Select Payment Method
Enter Payment Reference
In Open Invoices section, select the invoices to which you want to apply the deposit to.
Check the Amount to apply against invoices. The amount applied to invoices will not exceed the total amounts outstanding on the selected invoices.
Click on the Post Payment Receipt button