The reason the payment is unable to 'knock off' is due to the payment has already been knocked off. Once you reverse the payment, you will able to see the payment in the knock off list again.
To reverse the payment:
Go to Transaction, Reverse Knock Off.
Select the Unit No.
Click on the payment that needs to be reversed.
Click Apply.
Select the Invoice.
Click Reverse.
Click OK.
Note: This also can be caused due to the knock off listing as they have not done the full knock off. This happens when there is payment done, but no invoice attached.