Most businesses have goods that are returned either all of them or some of them. Zoho books allows for a credit note to be created and amount refunded to customer however Inventory continues to be counted towards fully or partially refunded sales orders and invoices. Additionally it remains open and shows under "Sales Orders for Packaging" section. These Sales orders should be marked as refunded and items refunded should be put back in inventory from there it can be adjusted as damaged stock etc...