Credit Verification

Although accurate evaluation of customers' credit worthiness is required, employees may perform it outside of the system by gathering data on the financial health of potential customers, including their current credit score.

In MYOB Advanced, you can configure credit verification rules to prevent risky customers (such as those who pay too late) from accruing debts that cannot be paid.

Credit Verification Application in Accounts Receivable

Credit verification is invoked each time a user creates an invoice for a customer in Accounts Receivable.

When you create an invoice and the customer fails the credit check, the system checks the value of the Hold Documents on Failed Credit Check check box on the Accounts Receivable Preferences (AR101000) form, which defines what happens to new invoices if the credit check fails:

• If the check box is selected, you may save the document (invoice or debit memo) with the On Hold status, but the document cannot be released until the credit violation is resolved.
• If the check box is cleared, you can save new documents with the Balanced status and process them regardless of the credit check result, although the system warns users about customers that have failed their credit check.

Credit Verification Application in Sales Orders

If the Sales Orders module is enabled, credit verification is invoked each time you create an invoice that originates in the Sales Orders module. When you create an invoice by using the Invoices (SO303000) form and the customer fails the credit check, the system checks the value of the Hold Invoices on Failed Credit Check check box on the Sales Orders Preferences (SO101000) form. This check box defines what happens to new invoices if the credit check fails:

• If the check box is selected, the invoice gets the Credit Hold status and can be saved with only the Credit Hold or On Hold status. For invoices with the Credit Hold status, on the Process Invoices and Memos (SO505000) form, you can click the Remove Credit Hold action. When the action is completed, the system saves the invoice with the Balanced status and you can process it further.
• If the check box is cleared, you can save new documents with the Balanced status and process them regardless of the credit check result, although the system warns users about customers that have failed their credit check.

Credit verification is invoked for orders that are based on an order type that has the Hold Document on Failed Credit Check check box selected on the Order Types (SO201000) form. For an order of such a type, when you create a sales order and try to change the status of the sales order to Open, the system performs a credit check of the customer, and if the customer fails the credit check, the document gets the Credit Hold status (and can be saved with only the Credit Hold or On Hold status). For orders with these statuses, on the Process Orders (SO501000) form, you can click the Remove Credit Hold action. This initiates credit checks for each order selected, and if the credit check is successful, the order receives a status of Open.

Setup of Credit Verification Rules

You can set credit verification rules for individual customers and for groups of customers. To provide default credit verification settings for groups of similar customers, you can specify credit rules by customer class on the Customer Classes (AR201000) form. If needed, you can disable or redefine the default rules for individual customers by using the Customers (AR303000) form.

In the Credit Verification box on these forms, you can select one of the following options:

You can view the unused credit limit of a customer in the Available Credit box on the General tab of the Customers form.