Setting credit check

This activity allows you to set credit check for the company or the business unit (BU). Tell me more.

Select the “Set Credit Check” link under the “Credit Management” business component.

The “Set Credit Check” page appears.

The system displays the following field:

Effective Date From

The date from which the credit check setup is effective. The system displays the system date by default.

The system displays the following field in the “Credit Bucket Setup” multiline:

Credit Bucket No.

The number identifying the credit buckets. The system allows you to set nine credit buckets to track customer overdues.

Note: An organization structure can have maximum of nine active credit buckets.

Enter the following fields in the multiline:

Note: The system displays the already set credit check values by default on launch of the page.

Status	Use the drop-down list box to enable or disable the credit buckets. You can select from “Active” or “Inactive”.
	Active – choose this option to enable or activate the credit bucket.
	Inactive – choose this option to disable or inactivate the credit bucket.

Note: The status of a credit bucket must not be ”Inactive”, if the status for any subsequent credit bucket is “Active”.

Days From

The starting day in the range of overdue days from which the credit bucket, is effective (Date Format). This field is mandatory for a credit bucket and must be greater than zero, if the “Status” selected is “Active”.

Note: The system displays the “Days To” with one day less than the day specified in the “Days From” field for the succeeding credit bucket.

Days To	The ending day in the range of overdue days until which the credit bucket, is effective (Date Format). The days specified here must be greater than or equal to the days entered in the “Days From” field.
Weightage %	The priority set for a credit bucket (Decimal) for the computation of credit rating. This field is mandatory for the “Active” credit bucket. The weightage for all the credit buckets must be less than or equal to 100 percent.

For example

Bucket No.	Status	Days From	Days To	Weightage
1	Active	1	30	10%
2	Active	31	60	20%
3	Active	61	90	30%
4	Active	91	120	40%

Bucket 3 cannot be inactivated, since its succeeding bucket i.e. bucket 4 is in the “Active” status. The system ensures that the range for every sequential bucket is continuous.

Enter the following fields in the “Credit Check Limits” group box:

Hold for Order	The upper limit for the credit rating, above which the transactions will be held for orders (Decimal). Mandatory. The value entered here must be greater than zero.
Hold for Pick	The upper limit for credit rating, above which the material will be held for issue (Decimal). Mandatory. The value must be greater than zero.
Hold for Ship	The upper limit for credit rating, above which the material will be held for shipment (Decimal). Mandatory. The value entered here must be greater than zero.

Example

Consider two customers A and B with credit ratings 1.8 and 2.1 respectively. The credit check limits for Hold for Order, Pick and Ship in the credit check setup are 1.5, 1.9 and 2.0 respectively.

Sale order transaction would be held for customers A and B since the credit rating of both have exceeded the limit. Pick / Issue would succeed for customer A since his credit rating is within the limit, whereas it will be held for customer B since he has exceeded the limit. Similarly, Shipping would succeed for customer A and fail for customer B.

Note: There are additional parameters in “Customer” component and function defaults in this component, using which the above can be superseded. The customer credit status can also be modified on a need basis through the “Modify Credit Status” activity of this component.

Enter the following fields in the “Credit Check Setup” group box:

Frequency

Use the drop-down list box to select the frequency in which you want to run the credit check. You can select from "None", "Daily", "Weekly", "Fortnightly", "Monthly", "Quarterly", "Half Yearly" or "Yearly". The system displays the value already set, if any, or “None” by default on launch of the page.

Note: Select “None” if you do not want the credit check run.

Start Date

The start date from which the credit check must be run based on the frequency (Date Format). Mandatory. The system date is displayed by default on launch of the page.

Credit Check Type

Use the drop-down list box to select the location where the credit check must be run.

The system displays “Company” in the “Credit Check Type” drop-down list box.

Balance Type	Use the drop-down list box to select the balance type based on which the credit check must be run. You can select from “Debit Balance” or “Net Balance”.
	Debit Balance – Indicates that the total debit balance for the customer alone would be considered for credit check. The unadjusted receipts, if any, would be ignored.
	Net Balance – Indicates the net balance from the customer would be considered for credit check.
	The system displays the value already set, if any, or “Debit Balance” by default on launch of the page.

Example

The total receivable from the customer is $5000 and the amount received from the customer is $1000. If the $1000 is not adjusted, the debit balance would consider $5000 for credit check The net balance method would consider only $4000.

Click the “Set Credit Check” pushbutton to set the credit checks.

Note: If the credit check type has been modified, then the system inactivates the credit statuses of all the customer and a fresh credit check run is triggered for the new type.

The system saves all the information to the credit check setup. The system saves the login ID of the user and the system date with the modification details.

The system displays the following fields:

Last Modified By	The login ID of the user who modified the credit checks last.
Last Modified Date	The date on which the credit checks set was modified last.