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Various questions
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Credit risk management
»
How to manage credit limit?
The
credit limit
is the maximum amount of Accounts
Receivable
that your company accepts to own with a given customer.
It depends on the volume of business forecasted with the buyer, the
payment term
granted and its financial capacities.
The
credit limit
is not necessarily the output of the Insurer guarantee and
Other guarantees
. It is defined with several criteria that can integrate these two fields or not.
In
My DSO Manager
, the
credit limit
is managed at the legal entity level. If you have multiple accounts that belong to the same legal entity, the
credit limit
has to be checked compare to the consolidated
receivable
of all of these accounts. This consolidation is based on the
Legal ID
field of customers' data.
There is one
credit limit
for one legal entity. If you change it in a customer account, it will be automatically updated on other accounts with same
legal ID
.
This principle is the same for the fields: « Insurer guarantee » and «
Other guarantees
».
In the customer
Risk report tab
tab, information and credit analyzes are necessarily done at the the legal entity level.
In the
Risk
report,
receivable
data are consolidated at the level of the legal entity in order to have a global view of the exposure with a given company.
It is also possible to update the
credit limit
in the
Risk
report by entering the amount directly in the table listing the customers.
It is possible to import and update this field with the import of customer data.
A tool to calculate the
credit limit
is available in the customer sheet, tab
Risk report tab
.
Manage
credit limit
validations from
My DSO Manager
. To see more:
How to create or modify
credit limit
validation levels?
How to validate
credit limits
?
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