Creating credit term

This activity allows you to define credit terms for the organization. Tell me more.

Select the “Create Credit Term” link under the “Credit Management” business component.

The “Create Credit Term” page appears.

Enter the following field:

Credit Term Code

The unique code identifying the credit term (Alphanumeric, 20). Mandatory. This code must not be left blank. These codes will be mapped to the customer in the “Customer” business component.

The system displays the following fields:

Currency	The system displays the “Base Currency” by default on launch of the page.
Status	The status of the credit term. The status is updated at the time of creating the credit term. It could be
	Active – Indicates that the credit term is active and can be mapped to the customer in the “Customer” business component.
	Inactive – Indicates that the credit term is not active. The credit term can be inactivated in the “Activate/Inactivate Credit Term” activity of this business component.

Enter the following field:

Desc.	A textual description pertaining to the credit term (Alphanumeric, 100). Mandatory.
	Zoom facility available.

Enter the following fields in the “Order Limits” group box:

Single Order Limit	The limit set for a single sale order in the base currency (Decimal). Mandatory. The single order limit must be greater than zero. The value of a single sale order must not exceed the limits specified here.
Total Order Limit	The limit set for the total outstanding for a customer in base currency i.e. the uninvoiced part of sale orders and the due amounts that are pending from the customer (Decimal). Mandatory. The total order limit must be greater than or equal to the single order limit.

The system displays the following fields in the “Credit Bucket Limits” multiline:

Note: The system retrieves the credit buckets in “Active” status.

Credit Bucket No.	The number identifying the credit bucket defined in credit check setup for overdue tracking. The system displays the credit bucket number in ascending order.
Days From	The starting day for the credit bucket in terms of overdue days.
Days To	The ending day for the credit bucket in terms of overdue days.
Weightage %	The weightage percentage based on which the credit rating is calculated.

Enter the following field:

Credit Limit

The credit limit for the individual credit buckets (Decimal). The limit must be greater than or equal to zero. The credit limit must be specified for the “Active” credit bucket.

Note: The sum of credit limit specified in the multiline must be less than or equal to total order limit.

If the credit limit has not been specified for the bucket, then the system displays zero.

Enter the following fields in the “Receivable Details” group box:

Dunning Required	Use the drop-down list box to set whether dunning is required. Dunning is the process of sending reminders to the customers for delayed payments. The options available are “Yes” and “No”. The system displays “Yes” by default on launch of the page.
Credit Check Action	Use the drop-down list box to select the action to be taken during credit check. The credit check actions available are
	Hold – Indicates that any new sale order/ pack slip/ pick order is put on hold the in the event of adverse credit rating for the customer.
	Ignore – Indicates that the no action needs to be taken even if the credit status of the customer is unfavorable.
	The system displays “Hold” by default on launch of the page.
Credit Check Level	Use the drop-down list box to select the credit check level. The options available are
	Customer - Indicates that credit check must be done only for the individual customer.
	Up the Hierarchy – Indicates that the credit check for the customer would be done by combining the actual balances and the credit limits for all the customers falling in his direct hierarchy

Note: The lateral branches of the customer hierarchy are ignored.

	Total Hierarchy – Indicates that combining the actual balances would do the credit check for the customer and the credit limits for the entire hierarchical group of customers, to which the customer belongs, starting from the highest parent.
	The system displays the “Customer” by default on launch of the page.
Discount Grace Days	The number of grace days provided to the customer to avail the discount (Integer). The grace days specified must be greater than zero. For example, if the customer can avail a discount till certain date, the discount period can be extended by the number of days specified here.
Receivable Grace Days	The number of grace days provided for accepting the receivables from the customer (Integer). The grace days specified must be greater than zero.
Residual Write Off %	The percentage of the amount that can be written off per transaction during adjustments, and that need not be considered as receivables (Decimal). The percentage specified must be less than 100.
Residual Write Off Amount	The negligible amount that can be written off per transaction during adjustments, in base currency (Decimal). The adjustment transaction would consider the percentage of residual writeoff or the amount, whichever is lower.
Applicability of Residual Write Off on Over Payments	Based on the selection of the checkbox, while adjusting the Credit document with a debit document, where Credit document Amount is greater than the debit document outstanding amount and the difference is within the residual write off % / amount, then the same is written off as residual write off. If the check box is not checked the system ignores this information and proceeds without Wirte off of over receipts.

Click the “Create Credit Term” pushbutton to create the credit term.

The system saves all the details regarding the credit term.

The system also stores the login ID of the user the created by and the system date with the creation details.

The system displays the following fields:

Created By	The login ID of the user who created the credit term.
Created Date	The date on which the credit term was created.