The following describes how to set up the system to perform a credit control in various ways. See About credit control handling for information on how it works.
The Credit control functionality is available both in Distribution and Service.
The following sections are included:
- Setting up the system
- Related tables, files and programs
- Business partner file, A/R basic data
- Credit stop code handling
- Work with credit profiles
- Work with order held reason codes
- Alerts/event messages
- Lost sales statistics
Setting up the system
You can set up the system to perform credit checks in several ways. For example, you can:
- apply a credit stop code to the debtor,
- apply a credit stop code to the credit profile that is associated with the debtor,
- define a maximum overdue days/amount combination on the credit profile for overdue A/R invoices,
- define a total credit limit on the credit profile.
In order for these functions to work, they need to be activated and a credit profile must be defined and associated with the applicable debtors.
Activation
The credit control handling is set up in the Function control file by activating the applicable functions which are preloaded. By doing so, you define in which program the system should perform a credit check.
Note: All functions may or may not be activated at the same time as they are working independent of each other. For example, if the CR-PL function is active and CR-SO and CR-SOL are inactive, and if the order type is defined with Pick list set to NO, then the credit check is performed during sales order entry despite the fact that neither of the applicable functions are active.
| Function | Description | ||||||
|---|---|---|---|---|---|---|---|
| CR-BTBOO | If this function is activated the value of all BtB-direct lines on the order will be included in the open order value regardless of where they are placed on the open order time axis when the total balance is checked against the credit limit when closing a sales order. | ||||||
| CR-CMIOO | This function is applicable for the Contract Managed Inventory (CMI) functionality and is valid for SCS-, WDS-, and WBS inventory contracts. If this function is activated, the open sales order balance will be totaled for all orders for the customer, including those with an inventory contract defined. If this function is not activated, sales orders for any inventory contract will be excluded from the total open sales order balance calculation. See Setting up and initializing the inventory contracts for Contract Managed Inventory (CMI) for those types of inventory contracts. | ||||||
| CR-ODUE | Overdue invoices: If this function is activated, then a credit check is done:
Orders will be held with reason code 20 for debtors who have exceeded their overdue days/amount threshold as defined in their credit profile. |
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| CR-QT | Quotation entry: If this function is activated, then a credit check against the credit limit, as defined in the credit profile for a debtor, is done:
CR-PL |
Pick list printing: If this function is activated, then a credit check against the credit limit, as defined in the credit profile for a debtor, is done:
|
CR-SO |
Sales order entry: If this function is activated, then a credit check against the credit limit, as defined in the credit profile for a debtor, is done:
|
CR-SOL |
Sales order line entry: If this function is activated, then a credit check against the credit limit, as defined in the credit profile for a debtor, is done:
|
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Related tables, files and programs
In this section tables, files and programs that are involved in the credit control handling are described. In each sub-section the related fields are described as well as how to complete them.
See the Panel help for a description of other fields on the different panels.
Business partner file, A/R basic data
In this file, you enter basic A/R related data for the customer/debtor.
| Field | Description |
|---|---|
| Debtor number | Optional. Enter the number of the debtor indicating the company to which you will send this customer’s invoices for payment and who is obliged to pay the debts, i.e. the invoices. |
| Release handler | Enter a code from Work with signatures to assign a credit handler to this debtor.
You release and manually assign holds in the Work with held sales/service orders routines. This function is advantageous for companies that use credit handlers who are assigned specific credit tasks or debtors. The routine facilitates this workflow by letting handlers view only credit holds or orders for debtors assigned to them. In addition, handlers can make a range of detailed selections (incl. date, cost centre and order status) to find the orders they need to work with. |
| Credit profile | Enter a credit profile for this debtor. A credit profile must be associated with a debtor if credit control handling should be implemented. |
| Credit limit | This value is automatically retrieved from the credit profile associated with the customer. |
| Credit stop code | Optional. The credit stop code works independent of other credit check parameters. You can stop a sale to a debtor or block changes to existing sales orders for any reason by using this code. The code is defined with its properties in Work with credit stop codes. See Credit stop code handling for details. |
| Terms of payment | Enter the terms of payment that should be valid for the debtor’s invoices. If a credit stop code on the debtor is defined with a terms of payment code different from this one, then that code will be retrieved and applicable on a new sales order, unless you change it manually on the order. See Credit stop code handling for details. |
Credit stop code handling
The Credit stop code handling provides the possibility to control how the credit check on customers and their sales orders is performed. This functionality applies to the following order functions which must be activated in the Function control file:
- Sales order (CR-SO) – a credit check is done and the specified actions are considered on this level when the handler exits the order entry/quotation routines.
- Sales order line (CR-SOL) – a credit check is done and the specified actions are considered on this level for every sales order line entered.
- Pick list (CR-PL) – a credit check is done and the specified actions are considered on this level when the handler prints a pick list for an order.
The Credit stop code handling incorporates the following:
Work with credit stop codes
The credit stop code works independent of other credit check parameters. You can stop a sale to a debtor for any reason by manually assigning a credit stop code to the debtor on the A/R basic data panel in the Business partner file.
The credit stop code can be used solely to stop sales to a certain group of customers. In this case, you would set up a credit stop code with Sales allowed set to NO. You then assign the credit stop code to the specific debtors.
Credit stop code actions
Different actions can be defined per credit stop code to control the handling of a sales order or sales order line by the credit check program due to certain stop codes. You can specify that the actions are valid either when the debtor’s credit limit is exceeded or when the debtor has overdue payments/invoice amounts or both. Therefore, the handling differs depending on during which function or on which level (on order header level, line level or during pick list printout) the credit check is performed.
Follow the instructions in Define a credit stop code.
Message handlers
This function allows you to assign message handlers to specific credit stop codes. When a debtor exceeds the credit limit or has overdue payments/invoice amounts or both, then the credit check program will send a text message or an alert to the message handler who has been assigned to the credit stop code when the system acts on action code 1 or 2.
Follow the instructions in Assign a message handler to a credit stop code.
Work with credit profiles
You assign a credit profile to debtors by using the Credit profile field on the A/R basic data panel in the Business partner file.
When setting up the credit profile, you have several parameters to consider that control when and if orders or order lines will be put on hold or rejected.
| Fields | Description |
|---|---|
| Max overdue days
Max overdue amount |
These two fields form the combination that defines the threshold for a debtor’s overdue A/R balance before orders are put on credit hold.
Indicate the maximum number of days that a debtor’s A/R balance may be overdue. Indicate the maximum total amount on overdue A/R invoices allowed for a debtor. |
| Overdue credit stop | Optional. Enter a credit stop code. If you enter a stop code here, you must also enter a maximum overdue days/amounts combination on this panel. See Overdue credit stop handling, Batch order hold and Batch order release for further details. |
| Base credit limit
Credit overdraw % |
The values entered in these two fields are used in the calculation of the total credit limit and updated to the Credit limit field (see below). These fields are included in the Credit overdraw percentage functionality.
Enter the base credit limit allowed for a debtor. Optionally, enter the overdraw percentage that is afforded to a debtor before the order/line is put on credit hold. |
| Credit limit | The value in this field is automatically calculated. It is the total credit amount that is afforded to a debtor, before their order/order line will be put on credit hold. This field is included in the Credit overdraw percentage functionality. |
| Credit limit stop | The setting in this field determines the outcome when a sales order exceeds the credit limit for the customer.
|
| Open order days | Optionally, you may enter the number of days that should be taken into account for open sales orders when the credit balance is being checked for a debtor.
Example: Open order days = 10 The new order value exceeds the credit limit, but since the dispatch date is set to be after 15 days from order entry (and open order days is 10 in this example) – this value will not be added to the current balance. The order can be further processed, but the balance must be settled within the 15 days. Otherwise, the order will be held. |
| Credit hold of lines | Indicate if a credit check should be made on line level.
If YES, then individual lines on an order are held during order entry if the credit limit is exceeded. This means that lines that were entered before the credit limit was exceeded can still be processed as usual in the sales order entry routine. If NO (and Reject lines = NO), then the whole order will be held if the credit limit is exceeded and the order will be stopped from further processing. Note: See Different credit hold scenarios for additional information. |
| Reject lines | Alternatively, indicate if you want the system to reject new lines, if the credit limit is exceeded.
If NO (and Credit hold of lines = NO), then the whole order will be held. Note: This alternative only applies for new lines. If an existing line is being changed and the credit limit is exceeded at that point, then that line will be held instead of rejected. Note: See Different credit hold scenarios for additional information. |
| Rejected line reason | Mandatory entry if Reject lines is set to YES. Enter a code from Work with lost sale reasons.
For DI order lines that were rejected while retrieved in batch, this reason code will automatically be updated to the lost sales statistics together with the order line information. For manually entered orders, you can manually trigger the creation of lost sales statistics during order line entry. See Lost sales statistics for further details. |
Work with order held reason codes
Order held reason codes are used to explain why an order or order line is being held. There are two types of reason codes used in this functionality: system-defined and user-defined codes. System-defined codes are preloaded into the system and are used when the system automatically holds an order or order line. If Manual release is set to YES for a preloaded code, then that system-defined code can also be manually entered/used just like a user-defined code.
Note: All preloaded order held reason codes can be protected through the Authority control handling in SECUR. You can only maintain preloaded codes if you have system administrator authority.
| Code | Description | Manual release |
|---|---|---|
| 01 | The customer’s total balance has exceeded their credit limit. | YES |
| 02 | The order has at least one line that should create a preliminary manufacturing order. | YES |
| 03 | The order is held due to the credit stop code defined in the Business partner file. | YES |
| 10 | The order is held because the advanced payment has not been received. | NO |
| 11 | The order is held because credit card authorisation has not been completed. | NO |
| 12 | The order is being held because payment was attempted with an expired credit card. | NO |
| 13 | The order is being held because payment was attempted with a credit card that was declined. | NO |
| 20 | The order is held due to overdue invoices. | YES |
| 30 | Sales restrictions exist. | YES |
| 40 | The net sales price calculation has yielded a negative value. | YES |
| 51 | The order is manually held after having contacted the customer. | YES |
| A0 | Awaiting OK from customer for shipping the goods. | YES |
| CU | The customer has been contacted. | YES |
| HO | The order has been manually held. | YES |
| NH | Controlled substance hold. Only applicable if running the US Pharma application. | YES |
As the name suggests, the user-defined codes are set up by the user, usually the System Administrator. These holds are always released manually. These should be set up if credit handlers will be making manual holds using the Work with held sales/service orders routines.
Alerts/event messages
If Alert Management is installed and activated, you can configure alerts for credit control purposes. For example, when the first line on an order is held, the system could send a message concerning the event to the pre-defined and activated receiver.
Two event types are applicable and must be activated for this purpose:
- Event type = SORDERHELD (order). An event is created if an order is held during credit control.
- Event type = SORDLIHELD (line). If Credit hold of lines is YES for the debtor’s credit profile and the credit limit is exceeded, then an event is created for the first held line on an order.
Follow the instructions in Assign a message handler to a credit stop code.
See Setting up Alert Management and Working with Alert Management messages for further details.
Lost sales statistics
For order lines that were rejected while created in batch (via Data Interchange), the system automatically updates the lost sales statistics with the order line information.
For manually entered orders (i.e., interactive orders), you can manually trigger the creation of lost sales statistics during order line entry. To be able to do this, the LSTSL-AO function must be activated in the Function control file.
This manual triggering is done in the order entry program through the Manual lost sales tracking function which is available from the Function list. You will be prompted to enter the reason for the lost sale.
Tip: Lost sales can be printed separately as Unfulfilled supply during order confirmation as additional information. See Setting up the Item sourcing functionality and About item sourcing during sales order entry for information on how to set up the system to print unfulfilled supplied item information.