Use Pre-Calculated Exposure
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This prevents the exposure from being calculated in real time. The Initialize Credit Summaries process must be run on a regular basis to obtain latest account balances from Accounts Receivable.
For Example:
The Initialize Credit Summary Process has been run.
The Credit Exposure Report shows that the Customer has an available balance of <$50> (i.e this amount is owed) and has an overall limit of 100 at site level. Orders booked for this customer will be placed on Hold.
The customer now makes a cash payment of $75 which is recorded and cleared in Receivables.
At this point a new order is created and booked. This order is place on credit check hold, Why ? Running the Credit Check Exposure report for the customer and credit rule shows that no change has been made to the available amount. If at this point you then run the Initialize Credit Summaries report followed by the credit Exposure Report. You will see that the balance Will change and in this example a credit amount of $25 is available. The Initialize Credit Summary process has updated credit tables in Order Management and the newly calculated balance will be used to determine if an order should be placed on hold.
Include Open Receivables Balance and Include Uninvoiced Orders
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Either one or both of the attributes must be selected (the application will ensure that at least one of these is chosen).
Include Open Receivables Balance:
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The Open Receivables balance will be used to calculate the credit amount available to the customer. The balance used is the customer balance taking into account any cleared payments. If Pre-Calculated flag is set the receivables balance used will be the balance of the account when the Initialize Credit Summary process was last run.
Include Payments at Risk:
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Selecting this attributes will also include in the customer balance payments, that are at Risk, i.e payments that have not yet been cleared.
Include Uninvoiced Orders:
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If selected uninvoiced orders will be included in amount of credit that is available. I.e Uninvoiced orders that have been booked will reduce the amount of credit available.
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The following are examples of how credit rule setup impacts exposure as shown in the Credit Exposure Report.
The receivables balance for the Customer is <5.61> - credit
Value of Orders Booked but not invoiced is $405 - this includes a single order for $45 that is on credit check hold. The credit holds have been cleared for the other orders.
EXAMPLE 1.
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Do NOT Use Pre-Calculated Exposure
Do Not Include Open Receivables Balances
Include Uninvoiced Orders
Do Not Include Orders Currently On Hold
| |---------------Credit Limit Currency ---------------|
| Overall Limit Exposure Available
--- --------------------- -------------------- -------------------
USD 47.00 360.00 <313.00>
EXAMPLE 2.
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Do NOT Use Pre-Calculated Exposure
Include Open Receivables Balances
Include Uninvoiced Orders
Do Not Include Orders Currently On Hold
| |---------------Credit Limit Currency ---------------|
| Overall Limit Exposure Available
--- --------------------- -------------------- -------------------
USD 47.00 354.39 <307.39>
EXAMPLE 3.
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Do NOT Use Pre-Calculated Exposure
Include Open Receivables Balances
Include Uninvoiced Orders
Include Orders Currently On Hold
| |---------------Credit Limit Currency ---------------|
| Overall Limit Exposure Available
--- --------------------- -------------------- -------------------
USD 47.00 399.39 <352.39>
EXAMPLE 4.
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Use Pre-Calculated Exposure
Include Open Receivables Balances
Include Uninvoiced Orders
Include Orders Currently On Hold
At the point a number of orders have been created and booked in Order Management. The following demonstrates how the Initialize Credit Summary process impacts Credit Exposure.
1. Value of orders created in
2. Initialize Credit Summary process is executed
3. Credit Exposure report shows exposure as $219.39 ($225 less $5.61 credit balance in AR)
4. New Orders Created in
5. Credit Exposure Report re-run and this still shows the credit exposure as $219.39
6. Initialize Credit Summary Process is executed
7. Credit Exposure Report re-run and this now shows the credit exposure as $399.39 ($225 + $180 lesss $5.61 credit balance in AR)
CREDIT EXPOSURE PRIOR to Initialize Credit Summary Process
| |---------------Credit Limit Currency ---------------|
| Overall Limit Exposure Available
--- --------------------- -------------------- -------------------
USD 47.00 219.39 <172.39>
CREDIT EXPOSURE AFTER Initialize Credit Summary Process
| |---------------Credit Limit Currency ---------------|
| Overall Limit Exposure Available
--- --------------------- -------------------- -------------------
USD 47.00 399.39 <352.39>
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REPORTS / PROCESSES:
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Initialize Credit Summaries Table Concurrent Program
Order Management enables you to periodically rebuild a credit exposure image
Credit Check Processor Concurrent Program
The Credit Check Processor program can be run on demand to re evaluate Booked orders that have not been shipped yet.
Credit Exposure Report
The Credit Exposure report can be used to analyze your customers total credit exposure.
