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Credit Area

What is Credit Area in Businessflo​

In Businessflo, the credit area refers to a feature within the system that helps manage and control credit limits for customers. It allows organizations to define credit limits, monitor customer credit utilization, and take appropriate actions to ensure that credit risks are mitigated effectively.

How to Create a Credit Area in Businessflo​

  • Module: SD - Sales & Distribution
  • Process Code: ARCA - Credit Area

There are two options available to navigate to this screen.

  • Click on Sales & Distribution -> Credit Controlling -> Credit Area
  • Write the process code for this screen in the search bar which will navigate you here directly.

credit-area

The list shows the Certification Authorities already being created in the system. Now either you can click on new button to create a new Credit Area or you can select from the list of corresponding Certification Authorities to view, edit or delete it.

Process​

credit-area

To create a new Credit Area, fill in the necessary details:

  • Please provide Code and Name for Credit Area.
  • Please select Currency.
  • Provide Notes if you want to add some additional information.

Basic Data

  • The selection between credit limit verification and balance verification as a credit type depends on the specific credit management requirements and policies of the organization. Here's a brief explanation of each type:
  1. Credit Limit Verification: In this credit type, the system checks the customer's credit limit during the sales transaction to ensure that the total outstanding balance does not exceed the defined credit limit. If the credit limit is exceeded, the system can trigger actions such as warning notifications, blocking the order, or requesting additional approvals. This credit type focuses on monitoring and controlling the customer's credit exposure based on the predefined credit limit.
  2. Balance Verification: In this credit type, the system verifies the customer's outstanding balance or open items in their account to determine if they have unpaid invoices or overdue payments. It does not consider a specific credit limit but rather checks the overall balance owed by the customer. This credit type is useful for organizations that do not enforce credit limits but want to ensure that customers meet their payment obligations before allowing further sales transactions.
  • Define Credit Limit if Credit Type is Credit Limit Verification.
  • Please select Payment Method.
  • Please select Account, Order Journal and Business Area.
  • Provide Line Text for adddition information if necesarry.

Now click on Save to save the information provided.