You added credit notes, but you took away the customer credit feature.

I still need the features of customer credits.

I'd use credit notes to for invoice billing adjustments, i.e., I over billed a client on an invoice, and preferred not to change the original invoice. Especially since the credit note requires you to select a service or product item.
What if the customer prepaid on an invoice that had many item codes?

Are we to create an item code for customer deposits or over payments?

 

I prefer to use the customer credits for advance payments/deposits/prepayments received.
The data entry screen was much like the payments, clean and simple; it just needed the little check box to notify the client and it would have been perfect.  Also the customer credit shows up in the payments report.