Credit limits

The credit limit is the outstanding balance amount a customer is allowed by the distributor before the customer’s orders are placed on credit hold. The system adds the customer’s total balance, on-order balance, and future-order balance, then compares this number against the credit limit value. If the credit limit value is exceeded, then the order are placed on credit hold.

The credit limit can be used at the group level in different ways. It can be set as a hard limit for all members of the group, it can be used as one of the checks for an individual member of the group, or it can be bypassed so all credit checking is based upon the limit for the individual member.

Specify group credit limit settings in Customer Master Group Setup-Credit. Select one of these values in the Apply Credit Limit By field:

• Apply Group Limit: Apply the group credit limit to all members of the group.
• Group in Hierarchy: Apply the group credit limit or the customer credit limit to the member.
• Bypass to Customer: Apply the credit limit based on the member’s customer settings.

The default credit limit is zero. Retain this value if you select Bypass to Customer, or to impose no credit limit restrictions on all members of the group. Otherwise, specify the credit limit value for the group in the Credit Limit field.

You can use additional credit limit hold settings at the company and warehouse levels to increase customer’s credit limit and maximum sales order amount. You can use the settings to reduce the number of orders that go on hold and the time required to review and release the orders.

You can set the Credit Limit Tolerance Percentage and Max Order Amount fields in these functions:

• SA Administrator Options-Documents-Sales Orders-Processing
• Product Warehouse Description Setup

The settings bypass standard logic for credit hold limits. The settings at the warehouse level override the values that you specify at the company level.

You can use any combination of these settings. This table shows various scenarios in which the order passes:

AO Cr Limit Tol %	AO Max Order Amount	Whs Cr Limit Tol %	Whs Max Order Amount	Cust Cr Limit	Scenario
Yes	Yes	No	No	Yes	Order amount does not exceed new credit limit using AO Credit Limit Tolerance % or order amount does not exceed AO Max Order Amount
No	Yes	No	No	Yes	Order amount does not exceed AO Max Order Amount
Yes	No	No	No	Yes	Order amount does not exceed new credit limit using AO Credit Limit Tolerance %
Yes	Yes	No	No	No	If no customer credit limit, then the AO settings are not utilized
No	No	Yes	Yes	No	If no customer credit limit, then the warehouse settings are not utilized
No	No	Yes	Yes	Yes	Order amount does not exceed new credit limit using warehouse Credit Limit Tolerance % or order amount does not exceed warehouse Max Order Amount
No	No	No	Yes	Yes	Order amount does not exceed warehouse Max Order Amount
No	No	Yes	No	Yes	Order amount does not exceed new credit limit using warehouse Credit Limit tolerance %
Yes	Yes	Yes	Yes	Yes	Warehouse settings override AO settings order amount does not exceed new credit limit using warehouse Credit Limit Tolerance % or order amount does not exceed warehouse Max Order Amount
Yes	Yes	Yes	No	Yes	Warehouse settings overrides AO settings. Order amount does not exceed new credit limit using warehouse Credit Limit Tolerance % or order amount does not exceed AO Max Order Amount
Yes	Yes	No	Yes	Yes	Warehouse settings overrides AO settings. Order amount does not exceed new credit limit using AO Credit Limit Tolerance % or order amount does not exceed warehouse Max Order Amount