In Dynamics 365 for Finance & Operations the Customer credit limit can be handled for all customers or for curtain customers individually. In this article we will explain how to set the credit limit and the ways it affects the transactions related to sales.
Set up the credit limit for all customers
In order to activate and set up the credit limit for all customers we must go in Accounts Receivable parameters page and click on Credit Rating.
Accounts Receivable -> Set up -> Accounts receivable parameters -> Credit Rating
In the following image we can see the Credit Rating form
In this form there are four field to be set up depending on the business requirements:
- Credit limit type
- Check credit limit on sales order
- Check credit limit on free text invoice
- Message when exceeding credit limit
The first one has options that needs explanation because the other ones can be easily understood. The Credit limit type has the following options that can be selected:
- None – No check for credit limit
- Balance – checks against customer balance
- Balance + Packing slip or product receipt – checks against balance and packing slip
- Balance + all – checks against balance and all other open orders
Setting up the credit limit for individual customers
If the company needs to check only curtain customers for credit limit, this can be done in the customer form. To see the setup form for individual customers credit limit, navigate to:
Accounts receivable -> Customers -> All Customers
Or
Sales and Marketing -> Customers -> All Customers
Select a customer and open the sections Credit and Collections as seen in the image below
Here the field Mandatory credit limit needs to be set to Yes.
The field Credit limit amount needs to be set for the system to know what the limit for the customer is.
Credit limit on Sales transaction
After setting up the credit limit as described above, the system will check transactions on the Sales order and Free text invoices to make sure that customers will not exceed the limit.
To check the credit limit on the Sales Order, navigate to Manage -> Customer -> Check credit limit. If the Sales order is under the limit the OK message will be displays. Otherwise a message will be displayed as in the image below:
The message shows the previous balance, new balance, credit limit and the credit exceeded.