Credit Management Part 7 - Credit Limit Logic

Tip of the Day: In Microsoft D365 Finance and Supply Chain (D365 F&SC), Part 7 What’s in Credit Management? This blog is the next part of a multi-part blog series detailing the Credit Management functionality in Dynamics 365 for Finance and Operations. Look for additional releases in this series!

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What logic is used when looking at the customer’s credit limit?

Since there’s a credit limit on the Customer credit group and the Customer record, it’s important to understand the logic of the hierarchy. Here’s the logic. . .

1) First, the system checks to see if the customer belongs to a Customer credit group, if the customer is in a Customer credit group, then the Credit limit setup on the Customer credit group is used.

If the customer is in a Customer credit group, and there is enough credit in the group, then, the individual customer’s Temporary credit limit including Insurance and guarantees is used.

If the customer does not have a Temporary credit limit, then the customer’s Credit limit including Insurance and guarantees is used.

For example, if the Customer credit group has s credit limit of $1M and the total sum of all the open Sales Orders for the group is $500K, that means there’s enough credit for the Customer credit group. Then the system looks at the customer. If the customer’s Temporary credit limit or Credit limit is $100K and the Sales Order is for $110K, the system knows that there’s not enough credit and will put the Sales Order on hold.

2) Second, if the customer is not in a Customer credit group, the individual customer’s Temporary Credit Limit including Insurance and guarantees is used.

3) Third, if the customer is not in a Customer credit group and if the customer does not have a Temporary Credit Limit, then the customer’s Credit limit including Insurance and guarantees is used.