Managing Credit Policy

With MYOB Advanced, you can use the following credit management tools:

• Credit terms: You configure credit terms to define documents' due dates. Credit terms may be used for giving a customer discount for early payment. For details on configuring and applying credit terms, see Setup of Credit Terms.
• Credit verification: You can enable a credit check process for each customer that automatically puts overdue invoices on hold and forbids the issuing of new invoices for a customer that has failed a credit check. For details on configuring and applying credit verification rules, see Credit Verification.
• Customer credit hold: You can manually put a customer on credit hold any time you consider it necessary. This causes the customer’s documents to also be put on credit hold. If needed, you can remove any such document from credit hold and release the document. For more information, see Customer Credit Hold.
• Overdue charges: You can configure additional charges to be applied to outstanding balances of customers who are consistently paying too late or not paying in full. For details on configuring and applying overdue charges, see Overdue Charges.
• Statement cycles: You can configure customer statement cycles to provide customers with information about their balances with your organization. For details, see Customer Statements: General Information and Customer Statements: Multicurrency and Consolidated Statements.
• Dunning letters: You can configure a sequence of dunning letters to remind customers about overdue invoices. For details on configuring customer notifications, see Managing Dunning Letters.
• Direct Write-Off method: You can use the direct write-off method to handle expenses that are required to run the business or that have been incurred in the operation of the business. For details on configuring and using direct write-offs, see Write-Off Methods.
  Note: We do not recommend that you use the direct write-off method for handling bad debts as it often violates the matching principle of accounting because it recognizes bad debt expense that is partly related to a previous accounting period.
• Allowance method: You can handle bad debts by using the allowance method. The allowance method is a better alternative to the direct write-off method because it follows the matching principle of accounting. For details on configuring and using allowance method, see Write-Off Methods.