What are "credit memos" in BillingCenter?

Credit memos are documents issued by a business that reduce the amount owed by a customer. They are typically used to correct billing errors, provide refunds, or account for discounts or adjustments after an invoice has been issued. When a credit memo is applied to a customer's account, it effectively lowers the balance that the customer needs to pay, reflecting a decrease in their liabilities. This is why the correct answer emphasizes the function of credit memos in reducing amounts owed, which is a crucial element in maintaining accurate financial records and customer relations in BillingCenter.