Defining Credit Limit Exceptions by Dollar Amount

To help customers who have good payment history and prefer to maximize their credit limit, you can set customer parameters to allow order processing for small amounts without requiring the order to be placed on credit hold and waiting for credit manager approval. This credit limit exception improves your better customers' order transaction experience.

Set your customer's parameters for a maximum order amount allowed over their set credit limit without approval and limit the amount allowed on a daily basis. These restrictions help keep your customers in good standing and let you manage the ordering process allowing your better customers a quick ordering experience.

Use the Credit Limit tab in the Credit Control options in Customer Maintenance to activate and define your dollar amount exceptions. All changes are kept in the customer change log to make sure the company can audit changes to the information and avoid exposure to fraud.

For information about overriding credit holds and denying credit on sales orders, see Overriding Credit Holds or Denying Credit in the Sales Management documentation.

To make sure that only customer's authorized personnel are allowed to place orders, you can assign a name to a credit parameter and list the maximum dollar amount available to that individual. The system checks this maximum limit when handling all credit exceptions. For more information, see Authorizing Customer Personnel to Place Orders.

Note: The system tracks credit limit changes in the maintenance log of the customer's record. Credit limit approvals are tracked in the sales order change log.

Example Assumptions:

Example 1 - Standard Order Processing

Based on these settings, the following will be true:

An order for $1000.01...	The system puts on hold for order limit overage.
An order for $1000 or less, plus an order for $100.00 or less...	The system processes the order as usual with a note that the additional order was automatically released using Credit Exceptions by Dollar Amount settings.
An order for $1000.00 or less, plus an order for $100.01...	The system puts the order on hold. The available credit was exceeded with the extra order by the Maximum Order Limit setting.
An order for $1000.00 or less, plus two orders for $100.00 or less each...	The system processes as usual with a note that the additional orders were automatically released using the Credit Exceptions by Dollar Amount settings.
An order for $1000.00 or less, plus six orders for $100.00 or greater each...	Since the Maximum Daily Limit was exceeded with the additional sixth order, the system releases the first five orders, but the sixth order is sent to credit hold for addressing.
An order for $1000.00 or less, plus an order for 1500.01 or greater...	The system puts the order on hold. The available credit was not exceeded, but the percentage over credit limit was. The second order is sent to credit hold for addressing.

Example 2 - By Daily Accumulation

Consider how these settings effect the order processing over a period of days:

Day 1	An order for $999, plus four orders at $100 each...	The $999 order is within the credit limits and processes normally. The additional orders are cumulatively over the credit limit at $400, but within credit limit exceptions. These orders process normally with a note that the order was automatically released using the Credit Exceptions by Dollar Amount settings.
Day 2	Five orders for $100 each...	The cumulative order amount of $500 is over the credit limit, but within credit limit exceptions and processes normally with a note that the order was automatically released using the Credit Exceptions by Dollar Amount settings.
Day 3	Three orders for $100 each...	The cumulative order amount at $300 is over credit limits, but within credit limit exceptions and processes normally with a note that the order was automatically released using the Credit Exceptions by Dollar Amount settings.
Day 4	Two orders for $100 each...	The system processes as usual with a note that the orders were automatically released using the Credit Exceptions by Dollar Amount settings.
Day 4	Two additional orders for $100 each...	The first order process normally with a note that the order was automatically released using the Credit Exceptions by Dollar Amount settings. However, the system puts the second order on hold since the Maximum Daily Limit of $500 was not exceeded, but the Maximum % over the credit limit. The second order is sent to credit hold for addressing.

The system performs credit checks in the following order before applying any of the above exceptions:

This selection enables the credit exception process in Sales Order Entry and the automatic ship ticket printing process.

Note: Users receive an error warning them of the parameters set, if the customer is within their credit limit settings in the Credit Limit tab in the Credit Control options in Customer Maintenance.

Note: In Sales Order Entry, the status bar may display the message Shipping Ticket on Hold. You can double-click this message and check which of these options are keeping the sales order on hold.

Important: If the Maximum Order Limit or Maximum Daily Limit are not set, the system defaults to 0.00 and causes any orders for any dollar amount to be put on hold for being above the order limit. If you do not want to set a Maximum Order Limit or Maximum Daily Limit (meaning you only want to use the Maximum % Over Credit Limit field), but you want to avoid putting orders on hold, make sure to set each field to be the same as the original credit limit.

Credit Limit field	$10,000
Customer's current A/R	$9,000
Customer's Past Due amount	$0
Current Credit Available	$1,000
New Order Limit	$999

Option	Description
Maximum Order Limit	Enter the dollar amount over the credit limit by which you are willing to let orders process for the customer. For example, if your customer is already over the credit limit, but you want to let him go over the credit limit by any amount below $100, enter 100.
Maximum Daily Limit	Enter the maximum dollar amount you are willing to let the customer order in a single day. For example, if your customer can process as many orders as they want, but only up to a maximum of $1000.00 per day, enter 1000. This amount resets each day. Note:When Credit Exceptions are applied, an order is invoiced manually or automatically. The amount of the processed generation is added to the this total daily limit. Orders that are cancelled or returned to order are removed from this daily limit. Credit and negative purchase orders do not effect the daily limit.
Maximum % Over Credit Limit	Enter the percentage over the credit limit you are willing to let orders process for the customer, such as 3% over the credit limit. This field accepts whole numbers only. For example having a credit limit of 10,000 with a Maximum % over credit limit of 3%, the customer can process as many orders as they want, but only up to a maximum of 3% of the credit limit. Which is $10,300. Users receive an error if the customer is within their credit limit warning them of the parameters set if either the Warn User If Customer X% Of Credit Limit or Warn User If Customer Within X% Of Past Due Limitcontrol maintenance records are set.

Maximum Order Limit	$100
Maximum Daily Limit	$500
Maximum % Over Credit Limit	15%