Credit limit scenarios

In Credit management, a credit limit can be assigned to customers at the customer level. Each customer can be assigned to a customer credit limit group, and each group has a credit limit. Therefore, a credit limit can also be assigned to customers at the group level. All customers that are assigned to the same customer credit group have the same credit limit.

In general, group credit limits are checked before individual credit limits. The individual credit limit doesn't always override the group credit limit.

This article describes five scenarios that are related to customer credit groups and individual credit limits.

The customer group credit limit is more than the individual credit limit

For example, the customer has an individual credit limit of $10,000. The customer is assigned to a customer credit group, and the group's credit limit is $15,000. In this case, the customer's "effective credit limit" is $10,000, because that amount is less than the group limit. Blocking rules first check the group limit. They then check the individual limit. Any sales order over $10,000 will be blocked.

The individual credit limit is more than the customer group credit limit

For example, the customer has an individual credit limit of $20,000. The customer is assigned to a customer credit group, and the group's credit limit is $15,000. In this case, the customer's effective credit limit is $15,000, because the blocking rules always check the group limit first. Any sales orders over $15,000 will be blocked.

The individual credit limit is set to 0.00 and Mandatory credit limit is set to Yes

If the customer has an individual credit limit that is set to 0.00, and the Mandatory credit limit option is set to Yes, the customer's effective credit limit is $0.00, even if the customer is assigned to a customer credit group. In this way, the customer can be part of a group, but all orders will go to Credit management.

The individual credit limit is set to 0.00 and Unlimited credit limit is set to Yes

If the customer has an individual credit limit that is set to 0.00, but the Unlimited credit limit option is set to Yes, the customer will have unlimited credit, even if they are assigned to a customer credit group.

The individual credit limit is set to 0.00 and the customer is part of a customer credit group

For example, the customer has an individual credit limit that is set to 0.00, the Unlimited credit option is set to No, and the Mandatory credit limit option is set to No. The customer is assigned to a customer credit group, and the group's credit limit is $15,000. In this case, the customer's effective credit limit is the group's limit, $15,000. Therefore, any sales orders over that amount will be blocked. This behavior enables the credit limit to be managed at the customer credit group level instead of the individual customer level. All customers that are assigned to the same group have the same credit limit.