Customer Credit Limit

As a business owner, you might sell your goods/services on credit to your customers. This in turn, increases the risk of having huge amounts of overdue balance by customers. Zoho Billing lets you set a credit limit for each customer, thereby letting you have control over the outstanding receivable balances. So, apart from just sending payment reminders for overdue invoices, enabling this will help you to avoid many outstanding invoices.

You will also be able to view the customer’s credit limit in the Customer Balance Summaryreport.

Prerequisite: Credit limits can be set only in the organisation's base currency even if a foreign currency has been associated to the customer.

Enable Customer Credit Limit

Note: The credit limit you set will not restrict or affect your customers' subscriptions. It only applies to their outstanding invoice balance and not their subscriptions.

To set credit limits, you will first have to enable the feature from your preferences. To do this:

Go to Settings on the top right corner of the page.
Select Customers under General > Module Settings.
Check the Enable Credit Limit option in the Customer Credit Limit section.
Choose what you would like to do when a credit limit increases. You can choose to:
- Restrict creating or updating invoices.
- Show a warning and allow users to proceed.
Click Save.

Setting Credit Limits for Customers

Once you have enabled the option, you will have to set a credit limit for each customer. Setting a limit can be useful when other users in your organization create invoices for a customer whose future ability to pay back, is unknown to them. To set limits:

Go to the Customers module.
Create a new customer or edit an existing customer by clicking Edit.
Scroll down to the Other Details section.
Enter the credit limit value in the Credit Limit field.
Click Save.

Customer Credit Limit Workflow

Once you enable the option and set the credit limit, you will be able to keep track of the limits set and further invoices being created. Based on your preferences, you will be notified while creating transactions.

Restrict Creating or Updating Invoices

You can select Restrict creating or updating invoices to display a warning not allowing users to create transactions for customers whose invoice total or balance due exceeds the credit limit. However, admins of your organization will be able to update the credit limit while this warning is being displayed.

Here’s how the admins can update the credit limit:

Go to the customer whose credit limit has been exceeded.
Create a transaction for the customer.
In the popup, click Update Credit Limit to increase the credit limit for your customer.
Update the credit limit for the customer.
Click Update and Save to increase limit and then proceed with the transaction.

Show a Warning and Allow Users to Proceed

You can select Show a warning and allow users to proceed to display a warning, and allow all users of your organization to update the credit limit while creating a transaction for a customer whose invoice total or balance due exceeds the credit limit. Here’s how:

Click View Details in the pop up to view the outstanding balances and credit limits.
You can choose to select Continue and save the transaction.
Click Update Credit Limit to increase the credit limit for your customer.
Enter the new credit limit for the customer.
Click Update and Save to increase limit and then proceed with the transaction.

The credit limit will be updated for the customer.

Note: The credit limit you set will not restrict or affect your customers' subscriptions. It only applies to their outstanding invoice balance and not their subscriptions.

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