I have checked and Account Credit Payment method has been set up in Payment Methods and links to a xero bank account but those amounts still don't come through.
Hi Andrew. Welcome to the Community.
Apologies for the delayed response.
Xero does not support applying over payments/credits to invoices via their API, therefore you need to manually apply over payments/credits that have been applied to related invoices in Xero.
In the following article, we show you how to apply overpayments with Xero:
I hope this helps.