Credit Limit - Customer Master

A customer can have a dollar amount or a code from a table placed on field #24 (Credit Limit) in the Customer Master file (Task 17).

At field #24, the Credit Limit table will appear on the right-hand side of the screen.   This table is setup and located in:

• Accounts Receivable (Module 2)
  • System Management Functions (Task 32)
    • Modify Application Tables (Sub-task 17)
      • Credit Limit Codes (Selection 2)
        • If you choose to enter the credit limit as a dollar amount, type in 500 for $500.00, type in 5000 for $5,000.00.  

How Order Entry handles Credit Limit:

Note:  The combination of the aging field and the open order $ field provides a total open balance for a customer, at any given time.  This may better help identify customers approaching their credit limit earlier and for unusual situations that are not necessarily reflected in a Customers Accounts Receivable balance.   i.e. Multiple orders from a customer on the same day, when there is a delay in posting of orders/adjustment/payments, backorder situations, etc.

Some parameters are used in during the entry of a sales to determine how the credit limit is used, go to:

• Accounts Receivable (Module 2)
  • System Management Functions (Task 32)
    • Modify Parameter Files (Sub-task 22)
      • A/R - General (Selection 1)
        • Look for the following parameters:
          • USE'OCR=
          • INCLUDE'QUOTES=
          • LIMIT'OPEN=
          • LIMIT’TEST=
          • USE’OCR= Y or N. Refers to Field 35 (Open Order) in the Customer Master file.  Do you want to use this field in the Customer Master file?  Yes or No.  The Open Order field can include Open Orders and Un-posted Invoices.  See document titled: Open Order Field in Customer Master Record.
          • INCLUDE’QUOTES= Y or N.  This asks if you want to include order entry quotes in Field 35 Open Order of the Customer Master file.
          • LIMIT’OPEN= Y or N.  Do you want to include Field 35 Open Order, in the credit limit test
          • LIMIT’TEST=   The options are: WARN, STOP, TERMS(x). If  the customer is over the credit limit, at the time an order is entered:
            • WARN - allows new orders for the customer to be opened, but will give a warning: “Customer credit limit exceeded !!!”       
              • If the customer isn’t past their credit limit when the order is first entered, but the new order puts the customer past their limit, the same message will appear.

            • STOP – does not allow new orders to be opened if the customer is past their credit limit.

              • ​If you try to open an order for a customer over the credit limit, you will get the message: “Customer credit limit exceeded !!!” and the cursor will go back to the customer number.

              • If the customer is past their limit, and an open order already exists for them in Order Entry and you try to select the action “Invoice”, you will get the message: “Customer credit limit exceeded !!!” and it won’t invoice the order.

              • If you try to back out of the order, you will get another message: “Action will be ignored and order will remain open”

            • TERMS(x) – allows new orders but forces the payment terms on the order to be a specified term, hence the x.   Terms are in the Payment terms table (found in 6/32/17/6) . For example

              • If payment term #2 is COD, you could set the parameter:  LIMIT’TEST=TERMS(2). This indicates if the customer goes over their credit limit, the payment term (field #14 on the Shipping screen of a sales order) will change from their normal payment term to the payment term of “2” –COD.

              • When opening an order for a customer who is over their credit limit, and using the example of:  LIMIT’TEST=TERMS(2) and Payment term #2 is COD, the following message will appear:

                • ​“Please inform the customer this order will be COD because they are over their credit limit.

                • Enter YES to continue:___”

After activating this function or if the Open Order values need to be reset, perform the following function:

• Accounts Receivable (Module 2)
  • System Management Functions (Task 32)
    • Reset Customer File Open Order $ (Sub-task 5)

This routine asks only one question after the introductory message: `Do you wish to continue?' ... answer `YES' to have the computer reset the Open Order figures on the Customer  records.

To verify what the Open Order $ amount is comprised of you would need to check each of the following:

• Order Processing (Module 6)
  • Order Entry & Editing (Task 1) 
    • Enter New/Change Existing Order (Sub-task 1)
      • Use the Function key search by customer

• Order Processing (Module 6)
  •  O/E Invoiced Order Holding File (Task 2)
    • Print Order Edit List (Sub-tasks 4 & 2 – if Summary Billing is used)

• Order Processing (Module 6)
  • Open Order Status Reports (Task 9)
    • Print by customer number.   

• Accounts Receivable (Module 2)
  • Sales Entry & Editing (Task 1)
    • Print Selected Sales Records (Sub-task 4)

• Accounts Receivable (Module 2)
  • Cash/Receipts Entry & Editing (Task 2)
    • Print Selected Cash Records (Sub-task 4)