Configuring Sales Credit Limits in Odoo 16
Proposing credit terms to customers is a crucial step for a business aiming to enhance its competitiveness. Each organization or enterprise should establish well-defined protocols to determine the payment conditions offered to customers and the extent of credit extended to them. One particularly advantageous aspect of this process is the implementation of Credit Limits, which can incentivize customers to make larger and more prompt payments, thus ensuring they remain within their allocated credit threshold.
By incorporating this advanced feature of Credit Limits, companies can institute a policy that places restrictions on credit for customers who exhibit delayed payment, fail to meet payment obligations or exceed their credit limit without valid justification. The inclusion of the Credit Limit option facilitates strict adherence to collection strategy procedures, enabling efficient monitoring of invoice payments and the enforcement of credit limits. This credit limit mechanism proves highly effective in defining the maximum allowable bad debt exposure for a company.
Accounting => Configuration => Settings
The Sales Credit Limit feature offers a convenient way to receive alerts when creating invoices and sales orders for partners whose total outstanding receivables exceed a specified limit. Additionally, the system provides an option to establish a Default Credit Limit, allowing you to set a credit limit in accordance with your business requirements. Similarly, within the customer Contact form, you can find the option to define a credit limit.
To access the CREDIT LIMITS section in the Customer creation form, follow these steps:
Go to Customers
Inside the Customer creation form, under the Accounting tab, you will find the Credit Limits settings.
In the CREDIT LIMIT section, you’ll see the Total Receivable field, where you can input the total amount owed by the specific customer. Additionally, you can activate the Partner Limit option to establish a partner-specific credit limit.
For example, if you set a Default Credit Limit of 150 in Settings, this amount will be automatically populated when you activate the Partner Limit option.
In this scenario, you have established the Partner Limit at 150.00, while the Total Receivable amount for the customer is 295.
Now, let’s proceed to create an invoice for this customer.
Navigate to the Invoices.
Click on the CREATE icon to initiate the creation of a new invoice.
Now select the customer, and you will receive a notification indicating that the customer has reached their credit limit, as shown in the image.
Odoo effectively triggers alerts when generating invoices and sales orders for customers whose total outstanding receivables surpass a predefined credit limit. This feature ensures that businesses can closely monitor and manage their credit exposure, promoting financial prudence and responsible credit management.
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