The color of the Folio indicates the status of payment on the folio.
Green
When a Folio has been fully paid the little dot next to the Folio should be green and you would be able to change the folio status to receipt.
Red
When there is an outstanding payment the dot will be red and you will only have the option to create an Invoice to send to your customer.
Yellow
When the dot is yellow it means that the folio is overpaid.
Product amount on that folio is lower than the payment that has been added to the folio.
This can happen when the wrong folio is selected when payment is added or products have been moved to another folio.