Process for Commercial Credit Check in ERP (SAP)

Commercial Department - Checking of Credit Limits of Customers

Sales Orders is sent to Sales Accounts for verification and clearance of credit status.

Sales Accounts conducts necessary ‘Credit Checks’ and “clears” or “holds” the orders in the draft schedule. The ‘credit check’ status is communicated by Sales Accounts to the respective Branches.

Orders with ‘credit hold’ are followed by the sales officer and status communicated to Sales Accounts for release of ‘credit hold’.

Sales Orders may be put on credit hold in the following cases:

S. No.	Credit “Restricting Event”	Rolling  Orders on Hold
1	The total outstanding for the customer is more than the approved credit limit.	The Sales Order (and all subsequent Sales Orders), the value of which if was to be included, the total outstanding in the Customer’s Ledger Account would exceed the approved credit limit.
2	Customer Invoice remaining unpaid even after 30 days (Credit Period) of expiry of the credit period	All Sales Orders, subsequent to the Sales Order for which the invoice remains unpaid for more than 30 days (Credit Period) after the expiry of the approved credit period, for which dispatches have yet not been made

A Sales Order if put on credit hold, may be released in the following manner:

• Automatically on satisfaction of the ‘restricting event’. In other words where the customer makes a subsequent payment to satisfy the credit restricting event. By way of special approval for release of Credit Hold jointly by respective Authority. 
• Such an approval may be made on account of reasons of business expediency with such reasons being formally documented.