Hi @timbows,
This is certainly possible using our Professional extension. This extension includes three new document types: Proforma invoice, Receipt and Credit note. The last one will allow you to create credit notes to your canceled or partially refunded orders after creating a refund. See Creating a refund / credit note.
Please note that we follow GAAP (Generally Accepted Accounting Principles) which means that administrative changes should be documented separately. This means that an original invoice should never be modified by a refund. In most countries (at least in the EU) this is even considered fraudulent (and illegal). We have chosen to follow this in both the free and the paid extension.
By the way, since WordPress.org does not allow us to provide support for paid plugins, or answering pre-sale inquiries in this forum, please contact us by email to [email protected], if you have further questions.