5 scenarios that show how credit limits are determined in Dynamics 365 Finance

In Dynamics 365 Finance, you can use the credit management capability to define a credit limit at the customer level. However, the same customer might also be part of a customer credit group that has its own credit limit. So how does Dynamics 365 Finance determine which limit to use for sales orders when there’s a limit set in both places?

Here are five scenarios that describe how customer credit groups and individual customer credit limits affect each other.

Scenario 1: Individual limit is lower than the group limit

  • Individual customer credit limit = 10,000
  • Customer credit group limit = 15,000

How the credit limit is determined: The customer’s effective credit limit is 10,000 because it’s less than the group limit. Blocking rules first check the group limit, and the customer passes these rules. Blocking rules then check the individual customer credit limit and blocks any orders greater than 10,000.

Scenario 2: Individual limit is higher than the group limit

  • Individual customer credit limit = 20,000
  • Customer credit group limit = 15,000

How the credit limit is determined: The customer’s effective credit limit is 15,000 because blocking rules always check the customer group credit limit first.

Scenario 3: Individual limit is 0.00 and mandatory credit limit is enabled

  • Individual customer credit limit = 0.00 and mandatory credit limit option is set to Yes
  • Customer credit group credit limit = 15,000

How the credit limit is determined: Even though the customer is part of a group, their effective credit limit is 0.00. This supports a scenario where the customer is part of a group, but all orders must go through credit management for additional review.

Scenario 4: Individual limit is 0.00 and unlimited credit is enabled

  • Individual customer credit limit = 0.00 and unlimited credit limit option is set to Yes
  • Customer credit group credit limit = 15,000

How the credit limit is determined: This supports a scenario where the customer is part of a group but their effective credit limit is unlimited.

Scenario 5: Individual limit is 0.00, and neither unlimited credit nor mandatory credit limit is enabled

  • Individual customer credit limit = 0.00 and unlimited credit option is set to No, and mandatory credit limit is set to No
  • Customer credit group credit limit = 15,000

How the credit limit is determined: The customer’s effective credit limit is 15,000 (the same as the group limit).

All these scenarios still have to meet the applicable blocking rule criteria for the customer, table, or group before the order can be sent to credit management.

Next steps

Check out the documentation for Customer credit groups for more information.

The post 5 scenarios that show how credit limits are determined in Dynamics 365 Finance appeared first on Microsoft Dynamics 365 Blog.

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