we often take prepayments for SOs. I've been trying to use the credit card feature to authorise then charge a customer for prepayment orders but the standard process seems to generate a Cash Sale rather than an invoice

Use Customer Deposits for prepayments. If you create it from the sales order it will automatically apply once an invoice is generated

Customer deposits are frustrating, I'm sure I'm missing something but in the end we just moved to "accept payment" and then apply it to an invoice once it's generated

What did you find frustrating about them? Besides for having to apply payments manually, it's also a different accounting impact which may be problematic.

whenever we accepted a deposit I could not find a consistent way of then being able to apply the payment to the resulting invoice when it was linked to a project. Accepting payment made it available to apply against all transactions which we just dealt with in the end but the desire was that a deposit could only be used against a specific projec / sales order

we are also experiencing frustration with deposits. in our scenario we often end up with the final invoice being less than the SO. so you end up with a portion of the deposit being unapplied. NS doesn't treat this as AR so it doesn't show up on the statement or outstanding balance

If you want it to sit in AR and not deposit liability then accept unapplied payments, and manually apply to invoices once generated.