Credit Control
Last updated
Last updated
If you are allowing credit on a regular basis, you may need automated controls to stop customers from building up excessive amounts due, On the Customer record, consider the following fields:
Credit Limit: if you want to put a cap on the maximum amount of credit to be extended to the customer, enter the amount here in your home currency. If zero is entered here, this is interpreted as ‘no limit’ not ‘a limit of zero’.
Override Credit Hold: if a customer is in breach of their credit terms but you want to allow them more credit, you can override the built in credit ‘holder’ by ticking this box. Use this with caution because it will allow the customer to accumulate more debt as long as it is ticked.
The system features automated blocking of orders from customers who are in breach of the their credit terms. The logic applied is quite complex, so we’ll summarise it below. First, however, we need to introduce one more control:
On your Account Settings (only account owners have access), you’ll find an option called ‘Customers In Breach of Credit Terms Cannot Order’. If ticked, this option will stop customers who are in breach of terms (over limit/overdue) from ordering at all, even if they are paying cash. This is the most extreme level of blocking and designed for use when you want to completely cut off customers that are not paying.
Here’s roughly how credit blocking logic works:
If ‘override credit hold’ is marked on the Customer record they will NEVER be blocked
If they are overdue they will be allowed to continue only if they are paying cash and you have chosen not to block cash sales from in-breach customers.
If they have no credit limit then they will not be blocked from accumulating more debt
If they do have a credit limit and are already over it they will be allowed to continue only if they are paying cash and you have chosen not to block cash sales from in-breach customers.
If they have a credit limit, are not already over it, but the current order would take them over it, they will be always be allowed to pay cash, but not credit (invoice flow).
On your online stores, these conditions are constantly checked as logged-in customers interact with your store and appropriate warning messages are displayed in the cart and/or checkout.
Note that customers' credit balances and credit holding logic operate at 'account' level, not at website level. Therefore if you have multiple websites that customers can buy from, credit holding will be effective on all sites. This may be surprising to customers as when they are in their account centres, they can only see invoices relating to that site, so might be unsure where the 'rest' of the balance comes from.
In the admin panel, most of these conditions are displayed as warnings to the admin user, but saving an order will fail if a credit block kicks in. Remember that you can always set a customer to ‘Override Credit Hold’ if you want to force an order through, but obviously this should be done with caution and judgement.
