Apply Company Credit Policy to Customer

This document explains how to set the rules for how the company's credit policy is applied to a customer.

The policy is based on a combination of the company's internal routines and external financial information – for example, the results of a credit check.


Values are defined that regulate factors such as how to calculate the due date on an invoice and the applicable credit limits for unpaid invoices and open orders. The values also define how customer invoices will be processed in managing customer debts.

The customer's insurance information is recorded as well.

The values are used as selection criteria when assigning overdue invoices to the credit manager in 'Credit Monitoring. Create Transactions' (RMS410) and analyzing the customer's credit status in 'Credit Monitoring. Process' (RMS420).

They are also used when creating various types of statements in managing customer debts.

The values defined for the customer are saved in the customer master file (OCUSMA). They can be reviewed in 'Customer. Open' (CRS610), panels J and K.

Before you start

Follow These Steps

  1. Start 'Customer. Open' (CRS610).
  2. Select the Open option for the customer and press Enter until the J panel is displayed.
  3. On the J panel, enter a set of payment terms and the basis for due date calculation (required values)
  4. Enter the credit limits, if any (optional).
  5. Enter the payer, if applicable. Press Enter.
  6. On the K panel, enter any of these three optional values: advice rule, payment reminder rule, and an interest rule, and activate them by selecting the adjacent check boxes (optional values).

    If a rule field is left blank, no invoices recorded for this customer are included in the corresponding routine.

  7. Select the 'Debt collection' check box if debt collection is used and enter a credit department reference (optional values).
  8. Select a statement code and statement rule (optional values).
  9. Enter the insurance information in the five fields reserved for this purpose (optional values).
  10. Enter a payment instruction (optional). Press Enter.
  11. Press F3 to finish.
  12. Enter Basic Credit Check Values (Company/Division Level)

    Start 'Settings – General Ledger' (CRS750/F).

    Specify whether or not to include post-dated checks, VAT or blocked invoices when calculating credit limits. Press Enter.

Parameters to Set

Program ID/Panel Field The field indicates …

Calculation of Due Date


Payment terms

... a set of terms defining:

a) How the due date is to be calculated

b) Whether the payment should be split into several payments with separate due dates

The terms are defined in 'Payment Term. Open' (CRS075).


Due date base

... the basis for calculating the due date.

The alternatives are: 1) Invoice date, 2) Delivery date.

The calculation is done automatically per invoice when invoicing in 'Customer Order. Open Line' (OIS101); the program is called from (OIS100).

Rule for Statements of Account

(CRS610/K), (MFS610/K)

Statement code

… how to manage the customer in the routine for creating a statement of accounts in 'AR Statement of Account. Open' (ARS140) and 'AR Statement of Account. Print Detailed' (ARS510).


1 = The customer is not included.

2 = The customer is included. However, no age distribution of invoices about to fall due is printed on the statement of account.

3 = Like alternative 2, but an age distribution is printed.

If you select alternatives 2 or 3, you must also select a statement rule for the customer on this panel. The statement rule determines the time period buckets for which to print the age distribution.

(CRS610/K), (MFS610/K)

Statement rule

… a rule for printing the age distribution of customer invoices when creating a statement of account in (ARS140) or (ARS510). (Compare the field above.)

The statement rule determines the range of time periods on which to base the printing of age distribution of invoices about to fall due. It also determines whether the age distribution will be based on the due date or the invoice date.

The statement rule is created in 'Statement Rule. Open' (CRS665).

Basic Credit Check Settings (Company/Division Level)


Credit check including VAT

… whether VAT amounts should be included when credit limits and outstanding balances are displayed online in (OIS120/E) and checked in (CRS930).

The company's VAT management and national VAT legislation determine whether or not this check box should be selected.


Credit check including blocked invoices

… whether the amounts of any blocked invoices should be included when credit limits and outstanding balances are checked in (CRS930).

Detailed Settings for Credit Limit Calculation (Customer Level)


Credit limit 1

... the highest credit amount permitted for overdue invoices. If this limit is exceeded, delivery of the customer order is blocked.

The outstanding balance for credit limit 1 is updated when (CRS930) is run during the night run (CRS999). An invoice that is not due until 'tomorrow' is not included in the outstanding balance for credit limit 1 'today', but as soon as (CRS930) has been run after midnight 'tomorrow' then the invoice is included in the outstanding balance for credit limit 1.

Credit limits are defined in the currency of the payer.

Credit limits 1, 2, 3, and 4, and their outstanding balances, can be displayed online, in the currency of the payer, in 'Customer Credit Limit. Open' (CRS315), and on 'Customer Order. Stop' (OIS120/E), and 'Maint CO. Stop' (COS120/E).

If credit groups have been defined, credit limits, and outstanding balances, for the credit group may also be displayed, in the currency of the credit group, on 'Customer Credit Group. Connect' (CRS316/E).

If the customer is selected for credit monitoring in (RMS420), the credit limits, and their outstanding balances, are however displayed in the local currency on 'Credit Monitoring. Display per Payer' (RMS421/B).

The four credit limits are represented as value types (20–23) on 'AR Inquiry Column Template. Open' (ARS066/F). The templates define the information to be displayed in 'Accounts Receivable. Display Balances' (ARS225).


Credit limit 2

... the highest credit amount permitted for invoices that are open but not past due.

The outstanding balance for credit limit 2 is updated continuously, through (CRS930). When invoices and payments are recorded, (CRS930) is called from the general ledger work file update program (GLS040).

The outstanding balance for credit limit 2 is also updated when (CRS930) is run during the night run (CRS999).


Credit limit 3

... the highest credit amount permitted for open invoices and open orders together.

The outstanding balance for credit limit 3 is updated continuously, through (CRS930) and (OIMNGPAY). When invoices and payments are recorded, (CRS930) is called from the general ledger update program (GLS040), and orders update the outstanding balance through (OIMNGPAY).

The outstanding balance for credit limit 3 is also updated during the night run, when (CRS930) and (OIS935) are run. (CRS930) updates the outstanding balance for invoices, and (OIS935) updates the outstanding balance for orders.


Credit limit 4

... the number of days past due permitted for a customer invoice with the oldest date. Valid values are 1–999. If the field is left blank or is set to 0, it is not used.

When Used

This field is only used when credit limits 1, 2 or 3 are defined and not exceeded.

Credit limit 4 is used during credit checks of customer orders, provided the function is activated in 'Customer Order Type. Open' (OIS010/F): When you record a customer order in 'Customer order. Open Line' (OIS101), a customer block code is applied if credit limit 4 is greater than zero and less than the permitted number of days past due. If the customer block code is not zero, an information message is displayed.




... the person or company who pays the invoice.

You enter a payer when an invoice is to be sent somewhere other than to the customer. Several customers can be connected to the same payer.

The payer is registered as a regular customer in (CRS610). The payer is then used as a key ID for selecting and displaying records in financial management (for example, when monitoring customer credit and risk), as well as when creating statistics.

(CRS610/J) Credit group

... a group to which the customer is connected through setup in 'Customer Credit Group. Connect' (CRS316).

In the situation where many customers are included in the same group, the company might have an agreement about common credit limits for the entire group. During order entry for any customer included in the group, the outstanding balances for the entire group should then be checked against the credit limits for the group.

(CRS316) Credit group

... ‘Credit groups’ are used for credit limit handling at a grouped customer level. For customers that are connected to a credit group, credit check is managed on credit group level.

See Credit Limit at Grouped Customer Level

Rules for Customer Debt Management


Advice rule

... a user-defined set of rules for the payment advice routine. Advice rules are defined in 'Payment Advice Rule. Open' (ARS030).

Select the check box next to the entered advice rule to activate it.


Payment reminder rule

... a user-defined set of rules for the payment reminder routine. These rules are defined in 'Payment Reminder Rule. Open' (CRS465).

Select the check box next to the entered reminder rule to activate it.


Interest rule

... a user-defined set of rules for the interest invoicing routine. These rules are defined in 'Interest Invoicing Rule. Open' (CRS460).

Select the check box next to the entered interest rule to activate it.



... whether unpaid overdue invoices may be turned over for debt collection.

Responsible Credit Manager


Credit department reference

... the credit manager who is responsible for this customer. This person is used as a selection criterion when selecting and transferring invoices for credit monitoring in 'Credit Monitoring. Create Transactions' (RMS410).

Credit managers are registered in 'Credit Department Reference. Open' (ARS025).

Payment Instructions to Bank


Payment instruction

... the identity of a two-line text, which serves as an instruction to the customer on which bank to use for payment. For more information, see Create Payment Instruction.

Information on Customer Insurance


Insurance company

... the name of the insurance company with which the user has insured the customer for a certain amount.


Insurance number

... the insurance policy number for the customer-specific insurance.

Note that the insurance is intended for customer losses and only applies to open accounts receivable records.


Customer number at the insurance company

... the number used by the insurance company for the customer.

The number is used when printing reports in 'Customer Insurance. Print Days Overdue' (RMS530) and ' Customer Insurance. Print Amount' (RMS535).


Insurance limit

... the amount at which a customer is insured in the user's insurance company.

Open customer debts must not exceed this amount.


Unapproved limit

... a new insurance limit, requested but not yet approved by the insurance company.

After the limit has been approved, you manually transfer the value to the 'Insurance limit' field.


Insurance status

... a user-defined status related to the provided insurance information. Valid values are 0–9.

The credit managers can use the status to classify the customer in various ways, etc.

Since this status is not program-specific, it is not updated by the system.

Related topics