Customer Setup - Credit overview

Credit history and settings

The Credit Limit is the outstanding balance amount you allow a customer to carry before the customer’s orders are placed on credit hold. The sum of the customer’s total balance, on-order balance, and future-order balance is compared to the credit limit value. If the sum of those balances exceed the specified credit limit, then the order is placed on credit hold.

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 set a minimum sales order amount for a credit check in the Minimum for Credit Check field. If you specify a minimum amount, a credit check is performed only if the absolute value of the sales order exceeds the minimum sales order amount. Determine the cost to perform a credit check and release a sales order. Consider the customer’s credit history before setting a minimum credit check amount.

Hold Period order approval allows orders to be placed on credit hold if that customer has a balance in the specified or later period. Default periods and their durations are set in SA Admin Options-Customers-Balances-Aging Periods.

Sales Order Status refers to the approval status for each new order placed through Order Entry. The default, Yes, applies if all orders are approved if within credit parameters. Other settings available are No, Cash Only, COD Only, Hold Until, and Open Until. If you select Hold Until or Open Until, specify an appropriate date in the Hold or Open Date field.

Fields such as Last Pay Date, # Times Late, Avg Days, and # of Payments are updated as new information is entered in Cash Receipts Entry. Unlike credit limit or hold periods, these historical fields have no effect on Order Entry. These fields provide primarily historical data. For example, the number of payments value represents the number of customer payments over their entire history in the system.

The average days value represents an average over time. The time frame may have been recalculated when the Customer Days to Pay Report was run and a specific date range was set. These historical fields are updated when payments are processed within Cash Receipts Entry and Lockbox Entry. The number of payments is also updated when a receive on account is processed.

Credit check information

The number assigned to this customer from Dun and Bradstreet is the Duns #. You can also enter a Duns number for each ship to for this customer. The Credit Service field contains the name of the credit service used to provide a credit rating on this customer. Record the Last Rating obtained from Dun and Bradstreet. The Last Rating Date field should be the date on which the last credit rating was obtained. Use the two user-defined fields to provide reference detail to further define the credit status or give specific details on the credit rating.

Basis payment information

You can use the fields in this section to review and recalculate Average Days to Pay more specifically. Using these fields, the calculation is based on the specific beginning and end dates, and the number of payments made during that time frame. You can set the dates for a more recent or meaningful time frame, then recalculate to see if you notice any trends or concerns. Comparing this data to data in a previous Customer Days to Pay Report can also be helpful.

• Avg Days to Pay - Value represents the average days the customer takes to pay during the Beg Date and End Date time frame.
• Basis # of Payments - Value represents the number of payments the customer has made during the time frame displayed in the Beg Date and End Date.
• Basis Begin Date - Represents: The date most recently set in the calculation dialog box. Or the date range set in the Customer Days to Pay Report if Update options are set to Yes.
• Basis End Date - Represents: The date most recently set in the calculation dialog box. Or, the date range set in the Customer Days to Pay Report if Update options are set to Yes.

Last YTD Info: To recalculate the average days to pay, click the Avg Day to Pay button. In the Last YTD Info window, specify a beginning and ending date. Click Calculate. Notice the current and new values display for both Avg Days to Pay and # of Payments. If you click Cancel, you can view the data and no updates are made. If you click OK, the system updates the Basis Payment Information with the new values. The system calculation is:

• number of payments within date range * average days to pay = total payment days
• invoice payment date - invoice date = days to pay
• (total payment days + days to pay)/(number of payments within date range + 1) = average days to pay
• Note: If there are no qualifying transactions for the date range entered, the value is calculated as 0 and this message is displayed: No Qualifying Records Found for Calculation. Continue with Update? Click Yes to continue or No to not continue.

The calculation dialog box displays these values:

• Basis Start Date: Defaults to the current date displayed in Basis Beg Date. Retain the default or specify a different date.
• Basis End Date: Defaults to the current date displayed in Basis End Date. Retain the default or specify a different date.
• Current Basis Avg Days to Pay: The current value displayed in Basis Avg Days to Pay.
• New Basis Avg Days to Pay: The recalculated value of Avg Days to Pay based on date range and # of Payments.
• Current Basis # of Payments: The current value displayed in Basis # of Payments.
• New Basis # of Payments: The recalculated value of # of Payments within the date range.

If you run the AR Days to Pay Report; set a date range and options to update, he Basis fields are updated to that time frame. If you do not set a date range, the report resets the Basis fields to the historical time frame.

DNBi

The DNBi section displays the Dun and Bradstreet data for the customer. Integration with DNBi web services enables the retreival of DNBi data when new customers are added, when a customer exceeds their credit limit, or when you request an update for a customer by clicking the UPDATE DNBI button. This button is available for customers assigned a country code with the DNBi Interface option selected in SA Table Code Value Setup. When you update DNBi data for a customer, the Last Review Date field is updated to the current date, and the Credit Limit may be updated. You can update or override values from the DNB update.