credit control management for long lead time SO and Delivery

[Former Member]

dear experts:

we have make to order busienss that require lead time to 6 weeks .during the period many SO will be created but customer credit is limited.

is there some solutions to have auto credit release for the rolling business which means within at least 6 weeks all SO can be released automatically the credit check.

or is there way to avoid the credit block for all the SO within the period considerring the long lead time...

the credit block will impact the rolling SO creation within the dynamic period.

[VeselinaPeykova]

What is the point of blocking an order when you have produced and delivered the goods to him?

Make-to-order does not come cheap, transportation is not for free. What if the client says that he is not going to pay?

The idea of credit check is to mitigate the risk of customer not paying.

Companies use advance payment or payment guarantee when the credit limit of a customer is low. Customers with low credit limit are usually the ones that you consider as more risky than the rest.

If you wish to consider for credit limit calculation only orders within a certain time frame - this is where credit horizon is useful, but it is different to what your business users ask.

If I were you, I would point the users to Investopedia's definition of credit checking:

A check performed on the financial backing of the counterparties in a forex
 transaction. This credit check ensures that both parties have the means
 necessary to cover their leveraged positions in the trade and is done 
before the transaction takes place

Either you misunderstood what the business users meant or your credit experts are very confused about what credit control is meant for.

[phanikumar_v3]

Have you tried check credit limit and Credit group fields in VOV8..

What will happen when customer placed more than his credit limit in this six weeks period-then credit limit concept can become numb in these scenarios...

Phanikumar

[Former Member]

Thanks Kumar,

i checked the VOV8 settings for the sales document type , the credit limit is auto credit control, credit group is for sales order.

in this way i also checked the auto credit control screen, but it makes many confusions on the checkes' part, the dynamic check and open item check ?

could you kindly read the meaning of this settings what is the setting purpose ...and forese what will happen ..

[phanikumar_v3]

Spoon feeding is highly discouraged here in our forum-Have you tried the F1 option there-Still the issue-You can ask(We cannot assign our works to the members)

As per your screen shot -Dynamic credit check of 3 Months (by taking delivery date)- a warning can be issued here during credit evaluations..(All the open orders that are due for delivery after 3 months will be ignored by the system during credit evaluations)

Also open item credit check gives a warning-If the Open items are 100% in the total credit evaluating documents.. (pl ask the business teams, why such credit calculation)

Phanikumar