Credit Limits and Collections
A credit limit is a policy for deciding when a customer may take on more unpaid balance.
A worked record to reuse
Example policy includes unpaid invoices and unbilled committed orders. Finance owns the 5,000 IQD exception and its reason. A 20,000 IQD allocated payment reduces exposure to 70,000 and increases available credit to 30,000 under this policy. Automated blocks, overrides and collections are configured or custom scope, not inferred from this worksheet.
| Credit-policy field | Amount, IQD |
|---|---|
| Approved limit | 100,000 |
| Open billed balance | 70,000 |
| Unbilled committed orders | 20,000 |
| Exposure under the assumed policy | 70,000 + 20,000 = 90,000 |
| Available credit | 100,000 − 90,000 = 10,000 |
| Requested new order | 15,000 |
| Approval exception above limit | 5,000 |
Use your own records to work through the example and identify the next action.
Put it into practice
Define the exposure calculation, overdue rule and authorised override. Attempt an order for a customer with a past-due invoice, then record a partial payment and try again. Make the warning and decision visible to sales and finance.
Put the right controls in place
Keep the credit policy owned by finance and visible to sales. Define approval authority, reminders and escalation steps. If you need automated credit controls or a specialist collections workflow, include that development in your implementation scope.
Use this guide with the people who own the process. Agree responsibilities, prepare the necessary records and turn the next steps into a working plan. Get help with your implementation.