Credit Area
A credit area is a credit limit that follows the customer across the whole group. A customer with a credit area is checked against everything it owes and has on order in every company, not only in the one company.
What it is for
Credit is checked when a sales order or a sales order journal is saved as released (see Sales Order and Sales Order Journal). Which documents are checked, and whether a breach stops the document or only warns, comes from the customer's Credit Rule. The limit comes from either the customer itself or its credit area:
- No credit area on the customer. The customer's own Credit Limit and Credit Days Overdue apply, counted in the current company only.
- A credit area on the customer. The lines of the credit area apply, and the customer's balance and open orders are counted across every company of the group.
What is counted against the limit: released sales orders not yet invoiced, open sales order journals not yet turned into orders, and posted invoices from sales orders less what has been collected against them.
Every field in plain words
| Field | What it means | What to put |
|---|---|---|
| Credit Area | The code | Required. Must be unique |
| Name | What it is called | Required |
| Currency | The currency of the limit | Required |
| Notes | Free text | |
| Block | Retired |
Basic Data
One line per kind of check.
| Column | What it means | What to put |
|---|---|---|
| Credit Type | The kind of check | A credit limit amount, a balance check against an account, or overdue days |
| Credit Limit | The amount, or for overdue days the number of days | Must be more than 0 |
| Payment Method, Account | For a balance check: the account whose balance for the customer is the ceiling | Hidden as delivered; see below |
| Line Text | Free text |
A balance check line needs a Payment Method and an Account, but both columns are hidden on this screen as delivered, so such a line cannot be saved ("Payment Method is mandatory for Line ID"). Use credit limit or overdue days lines, or have the columns shown for the company.
How to configure it
- Make the Credit Rule: which documents are checked, and stop or warn.
- Make the credit area with its lines.
- On each customer of the group, set Credit Area and Credit Rule on Customer In Legal Entity. Setting a credit area empties and locks the customer's own Credit Limit and overdue fields.
Scenarios
- A dealer buys from three of your companies and may owe at most one million in total. One credit area with a credit limit line of one million; put it on the dealer in all three companies.
- No new orders while invoices are more than 45 days overdue. An overdue days line of 45, and a credit rule set to stop.
What it is connected to
- Credit Rule decides where and how the check fires.
- Customer In Legal Entity carries the credit area.
- Sales Order and Sales Order Journal run the check.
If something looks wrong
- "Credit type cannot be blank. Line ID: ..." Pick a credit type.
- "Credit limit cannot be zero or less. Line ID: ..." Give a positive limit or number of days.
- "Payment Method is mandatory for Line ID: ..." A balance check line needs a payment method and an account; see the caution above.
- A customer invoice is saved even though the customer is over its limit. Customer invoices are not credit-checked. The check is on sales orders.