You are asking three different tasks:

“Will I record the payment for invoice at the full value”

This is the amount of the Actual Funds you got.

“or the amount minus the holdbacks/reductions?”

The reductions need to be processed as “not by money.”

“Also, would I apply the credit memo to the customer account or […]

Resolution for 'amount minus issue: 'My customer issued a payment for an invoice. The check includes a discount & few other deductions that now leave me short on the invoice.How do I record JE?' available: Yes.

The amount minus 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 amount minus issue yourself by looking for a resolution described in the article. If it is a complex amount minus issue or you are unable to solve the issue, you may contact us by clicking here or by using other amount minus support options.

For more information about resolving issues related to amount minus in Quickbooks/QBO or to get support for the issue 'My customer issued a payment for an invoice. The check includes a discount & few other deductions that now leave me short on the invoice.How do I record JE?', click the link below: