Types Of An Automatic Credit Check
There are several types of automatic credit checks. The first type of automatic credit check is the static credit check. The static credit check administers the credit check by getting credit exposure. Credit exposure is the combination of the following, such as open sales documents, open delivery documents, open billing documents, and open items or accounts receivables.
The open sales documents or open order values are the values of order items that are not delivered yet. The open delivery documents or values are the values of delivery items that are not yet been invoiced. The open billing documents or open invoice values are the values of the billing documents which have not yet been forwarded to the accounting department. Open items are documents that have been forwarded to the accounting department but have not yet been paid by the customer.
The second type of automatic credit check is the dynamic credit check. The dynamic credit check carries out the credit check by splitting the credit exposure into two parts. The first part is the static part which consists of open items, open billing documents, and delivery values. The second part is the dynamic part which consists of the open order value. The open order value includes delivery orders that are partially completed and undelivered. The value is calculated on the shipping date and stored in an information structure according to the credit horizon specified. A credit horizon sets a particular date in the future when a credit check will be done.
The third type of automatic credit check is the document value. The document value sets the maximum value allowed for a sales order or delivery value. This type of credit check is applicable to new customers whose credit limits have not yet been determined.
The fourth type of automatic credit check is the critical fields. The critical fields include terms of payment, additional value days, and fixed value dates. When this field changes, for example, the payment terms, a credit check is administered. This type of credit check is used for sales documents.
The fifth type of automatic credit check is the next review date. The next review date is located in the credit date in the customer master record. The credit review date must not go beyond the current date.
The sixth type of automatic credit check is the credit check on the basis of overdue items. This type checks the ratio between open items. Open items with a certain number of days overdue, and the customer balance must not exceed a specified percentage.
The seventh type of automatic credit check is the open items. This type of credit check requires an input of two values that are specified by the users. The two values are the maximum percentage of overdue items in open items and the number of days in which the open items are overdue.
The eighth type of automatic credit check is the oldest open item. The oldest open item is the basis for the credit check and must not have days overdue than the number of days specified.
The ninth type of automatic credit check is the highest dunning level. The highest dunning level is specified by the user to be allowed in the adjacent field. This type of credit check is tracked and stored in the credit database in the customer master record.
The last type of automatic credit check is user-specific. This type of credit check is used if the credit check does not fulfill the first eight types of credit checks