So I have a customer who bought some items from me and paid in cash and the invoice is now closed and marked as paid, but then he comes back to me to return some of the items he bought, how to do this in ZOHO books? 

I cannot use credit note as the payment was in cash, and I cannot apply credit note to closed invoices anyways. And If I do refund, then I cannot apply the discount rate in the credit note that was applied in the original invoice!  

I know I can delete the invoice and create a new invoice but I was wondering if there is a more elegant way to do this as I would like to track returned item and have a Sales Return account in my financial statements which deducts the sales revenue? 

Both Credit Note and Cash Payment Return should be registered in the Sales Return account. 

Thank you for your help