About Credit Hold

This topic provides an overview of credit hold.

If you have authorization to update the Credit Hold field, you can place a customer, sales order, or service order on credit hold manually.

Placing a customer on credit hold prevents you from making shipments to that customer, but it does not place individual orders on credit hold. To place individual orders on credit hold, use the Sales Orders form. To place a customer on credit hold, use the Customers form.

Activating Credit Hold

To activate the credit hold functionality, you must enter a code in the Limit Exceeded Credit Hold Reason field on the General tab of the Accounts Receivable Parameters form.

Note: If the Limit Exceeded Credit Hold Reason field is blank and you create or update a sales order when the customer's credit limit is exceeded, the order is not placed on credit hold and shipment of the order or posting of transactions is not prevented.

Identifying Customers and Orders on Credit Hold

If a customer is on credit hold, a large red X is displayed on the customer record and on all of the order records for that customer. If you have manually placed the customer on credit hold, the Credit Hold check box is selected.

The Credit Hold check box on the order is selected in these situations:

You have manually selected the field
The customer's credit limit was exceeded

Note: It is possible to manually place a customer on credit hold by updating the Credit Hold field on the Customers form. When this is done, the system automatically places all sales and services orders for that customer on hold. If the customer is later taken off credit hold, the system automatically removes the credit hold.

Individual sales and service orders can be either taken off or put on hold without updating the customer's credit hold status. This is done using the Credit Hold check box on the order. If the customer is on credit hold and the order is not on hold, a red X is displayed on the order even though the user is permitted to process the order accordingly.

What Happens When Order Lines Exceed the Credit Limit

If you add or make a change to an existing order line, and the order line exceeds the credit limit, the order is automatically placed on credit hold (if a credit hold Reason has been defined in Accounts Receivable Parameters).

If the order is for a subordinate customer that is using the corporate customer's credit, the order is placed on credit hold if the current order amount, added to the corporate customer's posted balance, plus the on order balance, exceeds the corporate customer's credit limit.

Using Credit Limits and Credit Hold in a Multi-Site Environment

When you enter or change a credit limit in one site, the credit limit value is changed in all other sites replicating that data. The On Order Balance shown for the customer at each site is the cumulative balance of that customer€™s orders at all replicating sites.

For example, a customer has a credit limit of $100. Site 1 has one open order for the customer, for a value of $50. Site 2 has one open order for $25. ("Open" in this case means that the Status = Ordered and nothing has shipped.) The customer€™s record in the Customers form shows an On Order Balance of $75 in both sites. If you add a new order line for $35 in either site, the proposed On Order Balance would be $110. Even though each site fits under the credit limit, the line item is added as Status = Planned because the proposed On Order Balance has exceeded the credit limit.

In a multi-site environment, the Originating Site of an order controls the credit hold status of the order for all sites from which the sales or service order may be shipped or processed.

Credit Hold Field

If you place a customer on credit hold, the following values are assigned to these fields:

Credit Hold = True
Credit Hold Reason = the customer's Credit Hold Reason
Credit Hold Date = today's date
Credit Hold User = user placing this customer on credit hold

When a customer is on credit hold, a large red X displays on forms when that customer's records are displayed.

Caution:

The system does not permit you to ship sales orders that have been placed on credit hold.

Clear this check box to remove a customer from credit hold. When you save the record, the system assigns the following values for each field:

Credit Hold = False
Credit Hold Reason = Blank
Credit Hold Date = Blank
Credit Hold User = Blank

When a customer is not on credit hold, a large green check mark displays on forms when you are displaying that customer's records.

Note: To change this field's value, you must be authorized.