cancel
Showing results for 
Search instead for 
Did you mean: 

Payment terms in Credit management

Former Member
0 Kudos

Hi!

What is the role of the payment terms while a credit check is executed for a customer in FSCM Credit management?

Thanks,

Chomps.

Accepted Solutions (0)

Answers (2)

Answers (2)

Former Member
0 Kudos

Hi,

As far as I know there should have no effect in standard Credit verifications. The open item will increase the total credit meanwhile it is not cleared. The fact that the open item is overdue does not change the credit balance. What could influence is the debtor quality and could trigger a Credit alarm.

Regards

former_member188063
Active Contributor
0 Kudos

Hi Chomps,

Payment terms means the time given to a customer or vendor to pay the value of goods.

credit management is used to check whether the customer has exceeded his credit limit given to him.

An agreement the company has with its customers or vendors, including:

Payment period

Price list

Total discount in the document

This information is used to calculate prices for the items; the due dates of invoices and the total discount.

So, systems takes what ever is entered in the Payment Terms to make the above checks.

Regards,

Sudhakar*