Implementing Credit Line Options can be a tool in protecting your business and setting clear parameters for your customers to adhere to. Credit Line Options allow you to predetermine what actions will occur when a customer reaches their credit limit or when their account is in default.
TABLE OF CONTENTS
- Credit Line Options Overview
- Payment Terms
- Selecting a Payment Term for a Company
- Customizing Credit Line Options by Company
- Understanding Hold Types
Credit Line Options Overview
Navigate to Settings / Accounting / Credit Line Options.
From this screen, you may choose the parameters your customers need to maintain in order to be in good standing and whether you wish to issue a Warning or put a Hold on the account. These Credit Line Options will be the defaults you set to apply to all customers. However, this can be managed and customized for each company that is set to Net Payment Terms by navigating to Sales / Customers / Companies / Accounting Details.
Note: Both the Warning and the Hold will cause a banner pop up in the order that explains the issue on the account. Accounts receiving a Warning will still be able to move orders forward, while those on Hold will not be able to progress any order through the workflow.
a. Starting Credit Limit - This is the set amount of credit you are initially offering your customers.
b. Grace Period - This is the number of days past a payment due date before the account is considered in default.
c. If Customer's Account is in Default - This occurs when at least one order for the company has a payment that is past the grace period.
d. If Customer's Account is over the Credit Limit - A customer is over the credit limit when the total sum of all their invoices exceeds the credit limit.
e. If a new order will put a Customer's Account over the Credit Limit - You may choose to issue a warning if a new order total will cause the total sum of invoices to go over the credit limit.
Payment Terms
Credit Line Options will apply based on how Payment Terms are set. To manage Payment Terms, navigate to Settings / Accounting / Payment Terms.
To add a new Payment Term:
1. Select the Green Plus button.
2. Name - This is the name that will appear as one of the options under the Payment Terms dropdown when selecting the Accounting Details for your customers. This can be found by navigating to Sales / Customers / Companies / Customer Details under the Accounting Details heading.
3. Net Due - Choose the number of days after the Balance Due In/On action is completed.
4. Balance Due In/On - Use the dropdown to select the action that will trigger the Net Due countdown.
5. Early Payment Credit Rules - Choose if you would like to give your customers a percentage credit for early payment and what those parameters will be.
6. Down Payment Rules - Choose how much of a percent down you will be requiring for this Payment Term.
7. Document Text - Any notes you have regarding this particular Payment Term.
Note: The Payment Terms you set determine when a company will be in default. Once a company enters into a default position, the Credit Line Options you have selected will then apply to that customer.
Selecting a Payment Term for a Company
To select a Payment Term for a Company, navigate to Sales / Customers / Companies and select the appropriate customer.
1. Select the Company Details tab.
2. Using the Payment Terms dropdown, select the appropriate Payment Term from the list.
Note: CoreBridge will automatically save your changes.
Customizing Credit Line Options by Company
Credit Line Options can be customized for each individual company that is set to a Net Payment term. To do this, begin by navigating to Sales / Customers / Companies and selecting the appropriate customer.
1. Select the Company Details tab.
2. Use the dropdown menu to select Payment Terms.
Note: Only certain Payment Terms, such as a Net Payment, will bring up the Credit Line Options box.
3. The Credit Limit will automatically populate to what was set as the default under Settings / Accounting / Credit Line Options. It can be customized in this section for each company.
4. The Credit Line Options box will automatically display what was selected previously in the Settings module. To customize this, select the Custom option with this toggle button. You will then be able to make changes for this individual company. CoreBridge will automatically save your changes.
Note: The Company Heading at the top of the page provides Payment Term information at a glance, including a quick summary of how much of the Credit Limit has been used.
Understanding Hold Types
There are multiple triggers that can flag an account with a Warning or Hold.
Credit Limit Exceeded Warning or Hold
This Warning or Hold applies to those accounts with the ability to operate on account. This type of Warning or Hold can be triggered in two different ways.
- The company has at least one payment that has lapsed the company's given grace period.
- The total number of invoices for this company exceeds the Credit Limit.
Payment Past Due
This Warning or Hold occurs when the payment due date has passed, but the grace period is still in effect.
Note: This only applies on those accounts that have payment terms which will calculate a payment due date. Payment Terms can be managed by navigating to Settings / Payment Terms.
Out of Balance
This Warning or Hold indicates that the order has an issue with the base calculations. There are several combinations that can trigger this type of Warning or Hold.
- Line Item Total Out of Balance - This occurs when the sum of the individual line items do not match the subtotal on the order.
- Taxes Out of Balance - This occurs when the sum of the line item taxes is not equal to the order tax.
- Negative Balance - This can occur when the customer account balance makes the balance on the order negative.
Ex: The customer has received a credit totaling more than the amount owed on the order.