QB Issue Resolution:

The easiest way to do this would be to create a journal entry. Do this: go to the + quick create > journal entry. On the first line use the account “Accounts Receivable” the amount you want to credit the customer in the credit column – in the customer column use the name of your customer. The next line – use the expense account but debit this one. I would add a note for your reference. Save and close. In order to finish this off correctly – go back to the + quick create and this time go to receive payment > find the same customer. You should see their open invoice – and at the bottom you will see your journal entry credited to their account. Make sure that the boxes at the ends of each of the lines for the invoice and the credit have the amount in it that is equal to the credit. This actually reduces the invoice in this step.

Resolution for Issue 'I want to reduce a customer’s invoice with an expense item. Using a credit memo only allows me to offset with an income item. How can I achieve this?' available: Yes (Solved).
Source: Intuit Community forum.

I want to reduce a customer’s invoice with an expense item. Using a credit memo only allows me to offset with an income item. How can I achieve this?: this issue or error code is a known issue in Quickbooks Online (QBO) and/or Quickbooks. Support for this issue is available either by self-service or paid support options. Experts are available to resolve your Quickbooks issue to ensure minimal downtime and continue running your business. First try to resolve the issue yourself by looking for a resolution described below. If it is a complex issue or you are unable to solve the issue, you may contact us by clicking here or by using other support options.

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