Checking the Credit Limit in Sales Documents

Credit Check for Sales Orders

The system performs a credit check of the customer for sales orders of most predefined types. When a user selects a customer for the order on the Sales Orders (SO301000) form, the system performs the customer credit check. If the credit rules specified for the customer on the Customers (AR303000) form have been violated (that is, if the customer has exceeded the credit limit, the days past due, or both), the system displays a yellow exclamation mark to the left of the Customer box. By pointing at the mark, the user can read the warning.

You can use the Hold Document on Failed Credit Check check box on the Order Types (SO201000) form to indicate to the system how the orders of the specific type should be processed if the customer fails the credit check:

• If this check box is selected for the order type, when an order of this type is saved (or taken off hold, depending on whether the Hold Orders on Entry check box is selected for the order type), it will be assigned the Credit Hold status. By default, the check box is selected only for the SA (Sales Orders with Allocation) order type.
• If the check box is cleared for the order type, when an order of this type is saved or taken off hold, it will be assigned the Open status. The order can be processed as the orders that passed the credit check can be processed.

If customer payments were entered or order amounts were decreased for a customer that had violated the credit rules, orders that were previously placed on credit hold can be released from it. On the Process Orders (SO501000) form, you can select the Release from Credit Hold action (as long as your user account has access to this action), select the orders with the Credit Hold status in the table, and click Process on the form toolbar. This initiates credit checks for each order selected, and if the credit check is successful, the applicable order receives a status of Open.

If there is a prepayment or payment applied for the full balance of the sales order, the system automatically changes the Credit Hold status to the Open status for the sales order.

Alternatively, you can release each order from credit hold individually by using the Sales Orders (SO301000) form. If you as a user have access to the Remove Credit Hold command on the More menu of the Sales Orders form, you can click this action to change the status of the order to Open and process it further despite of the failed credit check. If when editing this order you increase the order amount, then when you save the order, it will get the Credit Hold status. If you do not change the amount, you can process the order further; an invoice generated for the order will not get the Credit Hold status (even if the Hold Invoices on Failed Credit Check check box is selected on the Sales Orders Preferences (SO101000) form) and can be released.

Credit Check for Invoices

Generally, invoices are generated for sales orders that have passed the credit check; however, you may need to perform a separate credit check for invoices and hold invoices if the credit check has failed. Depending on your organization's business processes, the time range between shipment creation and invoice generation may be significant, and during this time, the prices may change. Also, services and warranties may be added manually to invoices, rather than to sales orders.

A credit check is performed for each new invoice that is created by using the Invoices (SO303000) form, and if the customer fails the credit check, the system displays a yellow exclamation mark to the left of the Customer box and a warning. However, you may want invoices to be placed on credit hold if they fail the credit check. You can select the Hold Invoices on Failed Credit Check check box on the Sales Orders Preferences (SO101000) form to indicate to the system that all invoices that fail the credit check should get the Credit Hold status. For invoices with the Credit Hold status, on the Process Invoices and Memos (SO505000) form, you can periodically perform the Release from Credit Hold action, which initiates a credit check and opens the invoices of those customers who have paid their outstanding balances fully or partially or have extended the credit limits.