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!

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.