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Credit Limit and Credit Check — A Guide from Scratch

The question to ask when a sales order is saved is: "If I give these goods to this customer, how much of our money will be out there?" For every sales order and sales invoice HNR calculates the account's exposure — how much it owes you or has tied up with you today — shows where it goes with this document, and compares it with the credit limit. If the limit is exceeded, you decide what happens: a warning only, manager approval, or stopping the sale. The default setting never stops a sale; it only warns.

1. What it is for

The credit check asks three questions at the time of sale and writes the answers on screen together with the document:

• Credit limit — does the account's exposure exceed the credit limit with this document? (sections 2-4)
• Overdue receivables — do the account's unpaid invoices older than a set number of days exceed a set amount? (section 4)
• On hold — has the account been put on hold manually? A sale to an account on hold always stops. (sections 4 and 9)

The check runs on the server: document entry in the office, Pulse (Nabız) on the phone, the B2B dealer portal and the field sales app all use the same rule, and it cannot be bypassed from the screen. The exposure figure is the same in the Account card › Reports › Credit Limit Usage report, on the account card's Risk tab and on the Owner Dashboard — all three call the same calculation.

2. How exposure is calculated

Exposure is the account's open risk towards the company today (in TL). A positive figure means the account owes you or has money tied up with you. For buyers, buyer-sellers and every other account type the formula is:

Exposure = balance + open sales orders + cheques/notes in portfolio + endorsed instruments not yet due + uninvoiced delivery notes − uninvoiced returns

For accounts of the vendor type the calculation is reversed; your exposure towards the supplier is measured:

Exposure (vendor) = −balance + open purchase orders + issued cheques/notes + company instruments (DBS / DTS / cheque / standing order) + endorsed instruments − returns

3. Where the limit comes from

The credit limit is not a new field; it is read from the existing limit fields on the account card (see Account Card — Intelligence and limits):

1. If the card's Total limit field is greater than zero, it is used.
2. Otherwise, if the Open account limit is greater than zero, that is used.
3. If neither exists, the limit is not defined; the "When no limit is defined" policy decides what happens (section 4).

Cheque, note, credit card, instalment, DBS and DTS sub-limits are instrument limits; their total does not count as a credit limit. (The old report showed this total as if it were the limit; on many cards the default credit card limit of 50,000 produced a false limit.) The customer cheque limit is measured separately but only warns. The collateral limit and the credit insurance limit are shown for information and are not part of the calculation.

Temporary limit increase

If you need to give a customer more goods for a few days, do not change the card limit: define a Temporary limit increase on the account card's Risk tab (amount, end date, justification). Until the end date the effective limit = card limit + increase; if the card has no limit, the increase itself is the limit. After the end date the increase lapses by itself; the tab shows who set it.

4. Check decisions and policies

Whenever a sales order or sales invoice is saved, the check runs four tests and applies the most severe result (block › send for approval › warn › pass):

There are four policies:

For documents that reduce exposure, such as returns, and for edits that lower the amount, the limit and overdue tests are skipped; only the hold is checked. A quotation is not binding, so it is not subject to the check. If the check cannot be calculated (e.g. the database does not answer at that moment), the sale does not stop: the document is saved, a "could not be checked" warning appears and is written to the audit trail.

5. The risk strip in document entry

While entering a sales order or sales invoice, a strip appears above the form as soon as you pick the account and updates as you add lines:

Limit 500,000 · exposure 431,200 · with this document 512,400 → Approval required

The utilisation bar in the strip is green (within limit), yellow (85% and above) or red (exceeded). Before you save, it tells you what will happen: "On saving, the document goes to a manager for approval and is saved once approved." or "This document cannot be saved…". View risk opens the account card on the Risk tab. On a quotation the strip is for information only ("Info: quotations are not subject to the credit limit check."). In the Garden+Step interface on the phone the same strip appears in a compact form.

If saving is stopped, a decision dialog opens: the title gives the reason (Credit limit would be exceeded · Overdue receivables threshold exceeded · Account on hold), followed by "The document was not saved." and the details of the check. If you are a system administrator you can enter a justification in the same dialog and continue with Save with justification (section 7); otherwise the dialog tells you to contact your sales manager. Your document stays on screen; nothing is lost.

6. A document sent for approval

1. If the policy is "Send for approval", the document is not saved at that moment and no number is used up; the content of the document is stored with the approval request. A "… sent for credit limit approval" notice appears, the draft is deleted and the window closes.
2. The approval request lands in the Management › Approvals list and in the Queued section of Pulse (Nabız) on the phone. It shows the limit, the exposure and the amount reached with this document; View risk opens the account card on the Risk tab.
3. If a manager approves, the document is saved under the approver's session and gets its real number at that moment. The check runs again just before writing: if the account has been put on hold in the meantime, the document is not written; the approver sees the current exposure (the approval card also has a "Current status" line). Approving the same request twice does not create a second document.
4. If a manager rejects, the document is never written.
5. In both cases the requester receives a system message (with the document number if approved).

If approval was given but the document could not be written (e.g. a stock or numbering problem arose in the meantime), the status becomes Approved but not saved. You can write it again with Try again in the account card › Risk › Documents awaiting approval list; the person who opened the request or a manager can do this. If the same user sends the same document for the same account a second time, no new request is opened; the existing one is shown.

7. Overriding with an administrator justification

Only a system administrator can override a document stopped by a "Block" decision (limit or overdue threshold exceeded): they enter a justification of at least 10 characters in the decision dialog (e.g. "the collateral cheque will be received today, the owner approved") and press Save with justification. The document is saved; the justification is written to the audit trail and to the account's list of check decisions as Passed with administrator justification. If a user who is not an administrator sends a justification, the document is still not saved and the message gives the reason. An account on hold is absolute: its documents cannot be saved even with a justification; release the hold on the account card's Risk tab first.

8. Edits, invoicing an order and the delivery promise

• When you edit a saved order or invoice, the check measures only the difference (new amount − old amount). If the amount goes down, the limit is not checked.
• When editing, the "Send for approval" policy cannot hold the document back, because it is already saved. If there is an excess, the save is refused; the way out is either a system administrator's justification or defining a temporary limit increase for the account. Under the "Warn" policy the edit is saved with a warning.
• Invoicing an order does not change exposure (the order amount moves into the balance); so only the hold is checked.
• Splitting the remainder into a new order in the Delivery Promise window does not increase the total, so it does not increase exposure (see Delivery Promise).

9. Account card › Risk tab

Every account card has a Risk tab. From top to bottom:

• Credit limit utilization: the percentage bar, the credit limit, any temporary increase and its end date, exposure, remaining limit, amount over limit and the source of the limit (total limit / open account limit / temporary increase only).
• Exposure breakdown: the items from section 2 with their amounts and document counts; for vendors, the vendor formula.
• Overdue receivables and cheque limit: overdue open invoices, those older than the threshold days, the oldest overdue, the customer cheque limit and portfolio + endorsed cheques; collateral and credit insurance limits if any (information).
• Credit check policy: the limit and overdue policies in force for this account, whether they are specific to the account or the company policy, and the approval rule tolerance.
• Editing fields for authorised users: the limit policy for this account (use company policy or account-specific), the temporary limit increase (amount, end date, justification), Put account on hold / Release hold (reason at least 5 characters).
• Documents awaiting approval and Recent credit check decisions: pending and completed requests; warning, approval, stop and administrator override decisions with who, when and what amount. Sales that pass within the limit are not listed.

10. Company policy: Settings › Company Information › Risk policy

A manager chooses the company-wide behaviour under Settings › Company Information › Risk policy:

• When the limit is exceeded — if the exposure exceeds the limit together with the document (default: Warn).
• When no limit is defined — if the card has neither a total limit nor an open account limit (default: Off).
• On overdue receivables — if open invoices older than the threshold days exceed the threshold amount (default: Off).
• Overdue threshold (days) and Overdue threshold (amount) — default 30 days and 0.
• Warn when the customer cheque limit is exceeded — if ticked, a warning is given when the cheque limit is exceeded.

Per-account exceptions, temporary limit increases and holds are managed on the Risk tab of the account card; the tolerance is the approval rule under Management › Approvals (section 4). The defaults never stop a sale: holding back and stopping only apply once a manager deliberately turns them on.

11. Channels: office, Pulse, dealer portal, field

The check lives on the server; whichever channel you write the document from, the same rule applies and the channel name appears in the check decisions:

• Office: the Document Entry windows (sales order and sales invoice). Orders opened from Delivery Promise also go through here.
• Pulse (Nabız) (phone): an order entered in Pulse goes through the same check; approval requests appear in its Queued section and can be decided there too (see Mobile — Pulse).
• Dealer portal (B2B): if a dealer's order is sent for approval, the dealer gets a "pending" answer; the order is written once a manager approves it.
• Field sales: the same applies to a field rep's order (see Field and B2B).

12. Owner Dashboard

The Attention box of the Owner Dashboard receives two warnings from the credit check: "N accounts are over their credit limit." (together with the name of the largest excess) and "N documents are awaiting credit limit approval." This way the owner sees pending credit decisions on the dashboard. See Owner Dashboard — Attention.

13. Frequently asked questions

Does a sale stop with the default settings? No. "When the limit is exceeded" defaults to Warn; "When no limit is defined" and "On overdue receivables" default to Off. Only an account on hold always stops.

Most of our cards have no limit; will every sale show a warning? No. The "When no limit is defined" policy is Off by default: a sale to an account without a limit goes through with no warning and nothing is recorded. If you want warnings, set that policy explicitly to Warn or enter limits on the cards.

The cheque, credit card and instalment limits are filled in, but it says "No limit defined". Those are sub-limits and do not count as a credit limit (section 3). Fill in the card's Total limit or Open account limit field.

Where is the order I sent for approval? It has not been saved yet and has no number. It waits in Account card › Risk › Documents awaiting approval and in Management › Approvals; you receive a message once a decision is made.

The customer paid today but the exposure did not change. If they paid in cash or by transfer, the balance and exposure drop as soon as the receipt is saved; refresh the screen. If they paid by cheque, the balance drops but the cheque enters the portfolio, so exposure stays the same; it drops when the cheque is collected.

Related guides: Account Card · Document Entry · Cockpit — Approvals · Owner Dashboard · Delivery Promise · Field and B2B · Mobile · Settings.