Credit Limit Preferences

The customer credit limit preferences determine the grace period for overdue invoices and what happens when customers exceed their credit limit. These preferences are in the Accounts Receivable section of the General subtab on the Accounting Preferences page at Setup > Accounting > Preferences > Accounting Preferences.

To set accounting preferences, you need a user role with the Accounting Preferences setup permission.

Credit limit handling preferences apply to all customers unless an administrator enables an override.

Customer credit limits are affected by the following accounting preferences:

Preference	Description
Customer Credit Limit Handling	This preference controls what happens when a sales order or invoice is initiated for a customer who's exceeded their credit limit. The options are as follows: Ignore – Ignores the credit limit and proceed with the transaction. Warn Only – Shows a warning when the new sales order or invoice puts the customer at or above their credit limit. The person entering the transaction must choose whether to continue with the transaction or cancel it. Note that the warning is not displayed while the invoice is in the Pending Approval state. Enforce Holds – Blocks the entry of a sales order or invoice that puts a customer at or above their credit limit. This preference does not affect the entry of opportunities, estimates, or cash sales.
Customer Credit Limit Includes Orders	Check this box to include orders that are entered but not yet billed when you make credit limit calculations. This ensures that customers don't place orders over their credit limit. Unbilled orders are included whether they're approved or not. Closed and cancelled orders aren't included in these calculations. Clear this box to include only billed orders when you make credit limit calculations.
Days Overdue for Warning/Hold	Enter how many days after the invoice due date you want to show a warning or enforce a hold. The value in this field is often referred to as the grace period.

Preference

Description

Customer Credit Limit Handling

This preference controls what happens when a sales order or invoice is initiated for a customer who's exceeded their credit limit. The options are as follows:

Ignore – Ignores the credit limit and proceed with the transaction.
Warn Only – Shows a warning when the new sales order or invoice puts the customer at or above their credit limit. The person entering the transaction must choose whether to continue with the transaction or cancel it. Note that the warning is not displayed while the invoice is in the Pending Approval state.
Enforce Holds – Blocks the entry of a sales order or invoice that puts a customer at or above their credit limit.

This preference does not affect the entry of opportunities, estimates, or cash sales.

Customer Credit Limit Includes Orders

Check this box to include orders that are entered but not yet billed when you make credit limit calculations. This ensures that customers don't place orders over their credit limit. Unbilled orders are included whether they're approved or not. Closed and cancelled orders aren't included in these calculations.

Clear this box to include only billed orders when you make credit limit calculations.

Days Overdue for Warning/Hold

Enter how many days after the invoice due date you want to show a warning or enforce a hold. The value in this field is often referred to as the grace period.

An administrator can allow overrides of the Customer Credit Limit Handling preference. For more information, see Overriding Company Preferences.

If your company allows overrides, you can set your own preference on the Set Preferences page at Home > Set Preferences. The Customer Credit Limit Handling preference is on the Transactions subtab in the Warnings section.

A credit hold is removed after the customer makes the appropriate payments. However, a manager can remove a credit hold manually on the customer record. For details, see Managing Customer Credit Limits and Holds

A credit memo reduces the value in the Balance field on the Financial subtab of the customer record. The total credit available to a customer is the value of the Credit Limit field minus the value of the Balance field. If a credit memo creates a negative balance due, the customer’s total available credit is greater than the specified credit limit. For example, a customer’s credit limit is $500 and the balance due is –$250. The customer can purchase goods on credit up to a value of $750.

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