Order Hold Codes for Credit Checking

You set up a credit hold code to automatically compare the credit limit that you set up on the customer master record against the order and any outstanding balances in accounts receivable. For example, you can set a customer's credit limit to 1,000 USD. If the customer has an accounts receivable balance of 100 USD, the order must be 900 USD or less or the system places the order on hold.

You can also specify a hold based on the percentage of the outstanding balance in accounts receivables. You must specify aging periods, such as 0 to 30 days or 31 to 60 days, to verify balance information. If you specify 31 to 60 days, the system does not include balance information from the first period in its comparison.

For example, a customer has a total accounts receivable balance of 6,000 USD; 5,000 USD in the 0- to 30-day period and 1,000 USD in the 31- to 60-day period. You set up a hold based on the percentage of the outstanding balance to be 20 percent of the total accounts receivable balance. You specify the 31- to 60-day aging period for the system to compare against the allowable percentage. Based on this information, the maximum allowable outstanding balance for the 31- to 60-day period is 1,200 USD. With an outstanding balance of 1,000 USD in the 31- to 60-day aging period, this customer passes the credit check.

You set up the order code for credit checking by entering the hold code in the Customer Credit Check processing option, located on the Order Holds tab, for the Sales Order Entry program.