Managing Customer Credit Limits and Holds
You can use credit limits and credit holds to manage the amount of credit you extend to customers. If a customer is delinquent on payments or reaches a pre-set credit limit, NetSuite can restrict the entry of new sales transactions on credit. The customer is restricted on new orders until they pay the invoices due, or you manually release the hold.
The credit limit you set for a customer does not include any of the customer’s subcustomers. The customer may reach its credit limit, but you can continue to create sales transactions for its subcustomers without restrictions. For more information see Creating a Subcustomer Record.
To use credit limits and holds, you set credit limits on customer records. A credit limit defines the maximum amount the customer is allowed to accrue in outstanding receivables.
The Customer Credit Limit Handling accounting preference determines the grace period for overdue invoices and what happens when customers exceed their credit limit. For more information, see Credit Limit Preferences.
When credit limits are enforced, a credit hold restricts entry of a new sales transaction under the following circumstances:
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Credit limit reached – When the customer’s preset credit limit is exceeded, the credit hold is applied automatically. The customer must settle one or more outstanding invoices to reduce the balance due and release the credit hold.
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Delinquent payments – A payment is delinquent when a customer’s Overdue Balance has exceeded the grace period in the Days Overdue for Warning/Hold accounting preference.
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Credit hold applied manually – The Hold field on the customer record is set to On. NetSuite ignores the assigned credit limit. You are restricted from placing an order for the customer even if the credit limit has not been reached. You must release a manual credit hold to permit the customer to create orders.
To manage customer credit limits and holds:
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Go to Lists > Relationships > Customers.
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Click Edit next to the customer name.
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Click the Financial subtab.
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In the Credit Limit field, enter the customer’s maximum amount of credit for the purchase of goods or services.
If you use the Multiple Currencies feature, the credit limit you enter on the customer record uses the customer’s primary currency. This is the total credit limit for all of the customer's transaction currencies. If you change a customer's primary currency, you must also re-enter the credit limit in that new currency. For more information, see Assigning Currencies to Entities.
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In the Hold field, select a credit hold setting from the following options:
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Auto – Credit warnings and blocks are applied according to the customer’s credit limit and the Credit Limit Handling accounting preference. For details, see Credit Limit Preferences and Credit Limit Warnings.
This is the default option for new customer records.
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On – Places the customer on hold and prevents the customer from purchasing goods on credit regardless of the Credit Limit value and customer balance. This option is sometimes referred to as a manual credit hold.
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Off – Disables credit limits and credit holds for the customer. NetSuite ignores the customer’s Credit Limit, and the customer can purchase goods of any value on credit.
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Click Save.