Credit control involves various tests/checks and consideration of certain financial relationships between customers. The data setup consists of the following:
The credit check, when executed, performs the following checks to find out whether;
For a customer belonging to a corporate credit relationship the system will first check the credit limit or the total overdue amount stated for the child customer itself, if such values are defined. If found OK, or if no defined values exist, the system will continue to check the limit and the total overdue amount for the parent customer.
The credit check depends on both the type of the credit check and how the credit control group, connected to each customer, has been defined. Note, If the customer is credit-blocked the check will always be performed, independent of the settings of the credit control group. The following options are available when a credit control group is defined;
Release Order is when a customer order has been created and then released, either manually by the user or automatically, like for example, when creating an order from a sales quotation or from an incoming customer order. If the customer is credit-blocked a check is also made directly when saving the customer order header and an information message is raised to inform that the order will be credit-blocked.
Create Customer Order Reservations is used when executing either the Create Customer Order Reservations, Reserve Customer Orders or if the reservation is executed from a Shipment. This also includes when the customer order is automatically reserved as a result of receiving a pegged supply through a purchase order, shop order or DOP order. Note: If the customer is credit-blocked, the check will also be performed when executing Manual Reservations of Customer Order Lines or Reserve Customer Order Lines, since no new reservations are allowed.
Create Pick List is used when executing either Create Pick List for Customer Orders, Create Consolidated Pick List for Customer Orders, Create Consolidated Pick List for Shipments or if pick list is created from a Shipment.
Deliver Order includes all pages where delivery can be executed, i.e. Deliver Customer Orders, Deliver Customer Order Lines, Deliver Customer Order with Differences, Deliver Customer Order Line with Differences or if delivery is executed from a Shipment.
It is possible to perform a credit check manually by using the Manual Credit Check option on the customer order header. Credit control group data is not required to perform a manual credit check. It is possible to perform a manual credit check for customer orders in the Planned, Released, Reserved, Picked and Blocked statuses.
A customer order that fails the credit check will be set to status Blocked. In this status the order cannot be further processed in the customer order flow except for allowing to create an invoice for anything that is ready for invoicing. This applies to already delivered order lines as well as a charge line not connected to any customer order line. When receiving a pegged supply through a purchase order, shop order or DOP order, the customer order will be automatically reserved also when status is Blocked. To proceed, the customer order must be handled in the Handle Blocked Customer Orders page where the options Release Blocked Order and Release from Credit Check exist. The difference between the two options is that when executing Release from Credit Check, the order will not be blocked again in any of the steps defined in the credit control group whereas when Release Blocked Order is being executed, there is a possibility of the order being checked and blocked again. Note: if the customer is credit-blocked it will not be possible to release the order in either way before the setting is cleared in the customer record. But after that the order can be released and will not be checked again, even if the Credit Blocked option is enabled again.
For the inter-site order flow, the external customer's credit can be checked when executing the supply site internal customer order. The external customer credit check on the supply site, and the credit check performing stages are controlled by the credit control group connected to the internal customer. First, check the external customer's credit - if it has failed, both the external customer order and the internal customer order are credit blocked. In this status, both the orders cannot be processed in the order flow and must be handled in the Handle Blocked Customer Orders page. If both customer orders are blocked due to a fail in the external customer's credit, the first external customer order must be released from the block or released from the credit check. At the same time, the internal customer order is released from the credit block or released from the credit check. The external customer credit check on the supply site includes the credit limit, credit block, advance invoices and prepayment based invoices which have not received full payment when the Advance Invoice Full Paid Check option has been enabled for the external customer. Note that the check to ensure that all the connected advance invoices are fully paid, is always done upon release and reserve, regardless of when the credit control group is configured to do the credit check.
One way to overrule the credit check is to use a payment term that has the Exclude from Credit Limit Control option enabled in the customer order. The customer order will then be excluded from the credit check independent of the settings of the credit control group. Note: This does not apply if the customer is credit-blocked.