Credit check for rental agreements

This document explains credit checks during rental agreement entry and at printout of picking lists.

A credit check is performed towards the payer of the rental agreement line to prevent orders from being delivered if the payer is not creditworthy.

When a rental agreement is created or activated, or a picking list is printed, a check can be done to ensure that the payer is reliable and liquid according to set definitions.

A rental agreement line is stopped if the payer's credit limits have been exceeded.

A rental agreement stop caused by a credit check should not be confused with a customer stop, which is set manually for the payer on 'Customer. Open' (CRS610/J). A customer stop set in (CRS610) also prevents the picking list from being printed.

Before you start

Credit check must have been activated on 'Rental Agreement Order Type. Open' (STS020/F) and in 'Settings – Credit Check for SO' (CRS705).
Credit limits must have been specified per payer on (CRS610/J).
If credit check should also be performed during picking release, this must have been activated on the dispatch policy connected to the delivery DO on the rental agreement order type, setting 070 in 'Dispatch Policy. Open' (MWS010).

Function of the credit check

The credit check is performed against the credit limits of the payer specified on (CRS610/J). If the payer is connected to a credit group in 'Customer Credit Group. Connect' (CRS316), the credit check is performed against the credit limits defined for the credit group on (CRS610/J).

When the agreement header is created the payer of the agreement header is used for the validation of credit checks. When a rental agreement line is created it is the payer of the agreement line that is validated. When the agreement is activated, all payers on all agreement lines are validated.

Credit limits are specified in the currency of the customer on (CRS610/J).

There are four types of credit limits that check different values:

Past due amount in accounts receivable.
Amount outstanding in accounts receivable.
Amount outstanding in accounts receivable plus the value of the next, non-invoiced invoicing period of active rental agreement lines.
Number of days past due for the invoice in accounts receivable with the oldest due date.

Credit limits can be left without values by specifying '0.00' as the amount or '0' as the number of days. In this case, the credit limit is not checked.

Credit limit 3

If you activate 'Chk outst order' (CHOO) in 'Settings – Rental Agreements' (STS699), and a value has been set for credit limit 3 on (CRS610/J), the next invoicing period of rental agreement lines is considered as an outstanding order value. The invoicing range is used to simulate the line amount. This amount is stored in the 'Simulated value' (SAP1) field in table STAGLI. SAP1 is not visible in 'Rental Agreement. Open Lines' (STS201).

Batch job STS699Sbm runs automatically when 'Chk outst order' (CHOO) is activated. The batch job updates the 'Simulated value' (SAP1) field in table STAGLI, and 'Order value not invoiced' (OVNI) in table CCUCRL for existing agreement lines in status 20, 25, 40, and 50.

It is recommended that you confirm in 'Job. Display History' (MNS320) that the job is done before continuing your work. The invoice batch job must not be running while STS699Sbm is running, as this generates incorrect values.

We do not recommend switching 'Chk outst order' (CHOO) on and off in (STS699), as the simulated amount in SAP1 can then become incorrect.

When you add an agreement line to an active rental agreement (or when you activate a temporary agreement line) and 'Chk outst order' (CHOO) is activated in (STS699), the simulated line amount for one invoicing period is saved in 'Simulated value' (SAP1) in table STAGLI and 'Order value not invoiced' (OVNI) in 'Customer Credit Limit. Open' (CRS315) and table CCUCRL.

The simulated amount is also saved in the 'Order value without risk' (OVWR) field if configured to do so on the agreement order type in (STS020).

If a termination date is set for the agreement line and the agreement order type is configured to invoice until termination, this termination date is used instead of the invoicing range end date to simulate the line amount. This means that the simulated amount for an agreement line with an outstanding invoice and an expected new invoice can cover more than one invoicing period.

Updates such as changing the price or invoicing range of an active agreement line also affect the simulated line amount and update the 'Order value not invoiced' (OVNI) field. The 'Order value without risk' (OVWR) field is also updated if configured to do so in (STS020).

When you invoice an agreement line, the simulated amount that was previously added to 'Order value not invoiced' (OVNI) in (CRS315) based on this agreement line is removed. During the invoice run, a check is made to determine if additional invoices are expected. If a new invoice is expected, the new invoicing range calculated after invoicing is used to simulate the line amount. The 'Simulated value' (SAP1) in table STAGLI and 'Order value not invoiced' (OVNI) in (CRS315) are then updated with this amount. The'Order value without risk' (OVWR) field is also updated if configured to do so in (STS020).

Credit without risk

If a customer has an agreement for which financing is already secured, and the job should not be included in any credit calculations, a separate rental agreement order type can be used. The order type should have 'Upd OV wo risk' selected on (STS020/F).

When a limit is exceeded

Credit limits are checked during agreement creation and activation depending on the settings in (STS020) and (CRS705). If a check is done and an exceeded credit limit is found during agreement creation or activation, a warning is displayed but the agreement can still be created and activated.

The rental agreement line is assigned an agreement stop code referring to the exceeded credit limit.

If a rental agreement line has an agreement stop code when trying to release the picking list, or if 'Credit check at picking release' is selected for the dispatch policy in (MWS010), the picking list is not printed.

Rental agreement stop code

All active agreement lines are displayed in 'Rental Agreement. Stop' (STS128).

When a credit limit is exceeded, the 'Agreement stop' field indicates which credit limits have been exceeded. The number 1, 2, 3, or 4 is displayed to indicate which type of credit limit is set for the payer.

The E panel in (STS128) displays a compilation of defined credit limits and current amounts for the comparison values for the payer of the rental agreement line. The same information is available in (CRS315). Function key F15='Refresh invoice amount' is available both on (STS128/E) and (CRS315/E). This triggers a recalculation of the outstanding and overdue invoice amounts, something that otherwise is only done by an automatic nightly job.

If an agreement line has an agreement stop code, the delivery number for this agreement line gets a corresponding delivery stop code.

Since an agreement can have different payers on different lines and by that also different agreement stop codes, the records in (STS128) are displayed per agreement line.

A stopped rental agreement line must be released on (STS128/E) before a picking list can be printed. An agreement line is released by setting the 'Agreement stop' field to 0 on (STS128/E).

If there are several agreement lines connected to the same delivery number only one of the agreement lines need to have an agreement stop code to block the delivery.

If the blocked agreement line should remain blocked, but the non-blocked lines should be delivered, these, or the blocked line, can be moved to another delivery number. As soon as the delivery number no longer has a connected blocked agreement line, the delivery stop code for this delivery is removed and the picking list can be created.

Delivery stop code

A stopped delivery can have various reasons.

If the blocked delivery is because of a customer stop in (CRS610), the block code on the payer in (CRS610) must be removed to release the blocked delivery.

If the blocked delivery is because of an exceeded credit limit, the agreement stop code must be edited in (STS128) for each agreement line.

The delivery stop code is removed when there are no agreement stop codes for connected agreement lines and no customer stop code for the payer in (CRS610).

If 'Credit check at picking release' is selected in (MWS010) for the dispatch policy, a new credit check is performed when trying to release the picking list. This means that even if the agreement stop code has been removed for all agreement lines in (STS128) for the delivery, but the payer still has an exceeded credit limit, the delivery is blocked again when trying to release the picking list.

The picking list status is automatically set to '03' in 'Delivery. Open Toolbox' (MWS410) and the delivery cannot be done until the payer no longer has any exceeded credit limits. You can release the picking list if you change payer on the agreement line to a payer with no exceeded credit limits.