In my previous post I detailed the use of automatic credit limits. In this post I would like to further explore the use of the sales order credit blocking rules.
Key notes
Credit holds for sales orders do not apply or update the sales order hold functionality. Both functionalities are to distinct functions.
As the name suggest sales order credit holds do not evaluate postings for project invoices and free text invoices. The blocking rules will consider the customer balances (credit limit) impacted by those invoices.
Credit management checkpoint can be configured at the sales order confirmation, picking list, release to warehouse, packing slip and invoice stage. This means that the blocking rules will be checked at the point of posting of these transactions.
If the blocking rules determine the sales order must be blocked, the posting will not complete and the sales order is added to a credit management hold list. The sales order can be released by manually releasing the sales order or by running the ‘evaluate’ process. This will re-evaluate the blocking rules. If the blocking rules will update the bocking reason or will unblock the sales order. It is also possible to reject the sales order from the credit management hold list. When the sales order is rejected the sales order header will be updated to a rejected status.
Graces days can be configured in between posting checkpoint. Grace days will ensure blocking rules are not re-evaluated after the blocking rules have determined the sales order shouldn’t be blocked. For example if the sales order blocking rules are invoked at the confirmation stage the blocking rules will not be invoked that the other checkpoint during the grace period. The grace period can be configured in the credit management parameters.
Rule type
For each of the 7 different blocking rules, two rule types can be specified:
Select Blocking to create a rule that blocks an order.
Select Exclusion to create a rule that will exclude another rule from blocking an order. However the exclusion will only relate to the specified blocking rule type. For example, if a exclusion rule has been configured to for terms of payment: ‘cash’ but another blocking rule from another rule type is also applicable, the rules will determine that the sales order needs to be blocked. The release sales order settings specified on the sales order amount exclusion rule will overwrite any other blocking rule.
Blocking rules
The following blocking rules can be defined:
Days overdue
Block rule defined based on number of days overdue and ability to specify per account/credit group and risk group (calculated based on automate credit limit).
Accounts status
Simple blocking rule that can be setup against the account status (customer field)
Terms of payment
Specified based on the account/credit group, risk group (calculated based on automatic credit limit) and days credit limit expired. Enter the Days credit limit expired for the selected blocking rule before an order is placed on credit management hold. The number of days overdue represents additional grace days that are added to the number of days that the credit limit has been expired.
Overdue amount
Overdue amount rule is a combination of the overdue amount and the credit limit threshold. You can define the limit amount that will block the order. This rule also evaluates the percentage of credit limit that has been used.
Sales order amount
The rule evaluates the total value of the sales order, if the outcome of the operator and the sales order amount is true than the rule will be initiated.
Against sales order exclusion rules users can enable the ‘Release sales order’ setting. This setting will release the sales order immediate without considering any other blocking rule.
Credit limit used
Select the Threshold remaining that defines the percentage of the credit limit that will block the sales order. If the value of an order increases the amount of the credit limit used above the percentage, then the order will be placed on hold.
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