When you wish to apply credit to a booking, go into the booking and then click on the 'Add Manual Payment' button, then add the amount (the system will default to the full account credit balance/or the remaining balance on the booking) into the Apply Credit field and select the payment type (generally customers use the Account Credit payment type - you can add custom types by clicking on the button below)
Once you click on the User Credit button the system will then automatically deduct the credit used from the customers balance, and create a payment record for the booking.
