Zoho Inventory

Help Docs

Customer Credit Limit

As a business, you may provide your goods and services based on credits to your customers. After a point, it becomes difficult to manage those credits, especially with a large number of customers. Setting a credit limit will help you in controlling the amount of outstanding receivables any customer can have at a point.

Scenario: Sam used to sell products to his customers and maintain credits when he started out his business. As his business progressed, it became difficult for him to control the credits that each of his customers owed him. Sam set up Credit Limit for each of his customers using Zoho Inventory, which allowed him to maintain control over how much outstanding receivables his customers can have.

Enabling Credit Limits

To enable credit limit for your organization:

  1. Go to Settings > Preferences > Customers and Vendors.
  2. Select Enable Credit Limit.
  3. Choose what you want to do when the outstanding receivables exceed the credit limit.
    • Restrict creating or updating invoices.
    • Show a warning and allow users to proceed.
  4. If you want to consider sales order amount in a customers credit limit, select the Include sales orders’ amount in limiting the credit given to customers option.

Setting a Credit Limit for Your Customers

To set a credit limit:

Credit Limit

How it Works

Restrict Creating or Updating Invoices

If you have chosen this option under preferences, you will not be allowed to create or update invoices that exceed the credit limit for a customer. 

Restrict Credit Limit Credit Limit details

Note: Only admins and users who have the configure credit limit permission enabled, can update the credit limit.

Show a Warning and Allow Users to Proceed

When the invoice total and balance due exceeds the credit limit set for a customer, you will be alerted before proceeding with the transaction.

Credit Limit Warning

Note: Only admins and users who have the configure credit limit permission enabled, can modify the credit limit for any customer.

TOP