Basic Configuration Credit Management in Microsoft Dynamics 365 Finance and Operation: Part-1

In this blog series I will try to explain the credit management feature. So, lets start with the part-1 where we will understand some basic setups and configurations.


Customer credit management lets you manage credit limits and control the flow of sales orders through the posting process, based on credit rules that you create.

The credit management process can include any of the following steps:

  • Update credit attributes for customers to provide additional information about their credit worthiness.
  • Create credit limits for customers by using credit limit adjustments.
  • Create temporary credit limits for customers by using credit limit adjustments. In this way, you can temporarily increase or decrease customer credit limits, based on business requirements.
  • Add information that can affect the credit limit, such as information about insurance and guarantees.
  • Create customer credit groups that link customers together so that they share a single credit limit.
  • Assign risk scores to customers, and then use the scores to automatically generate credit limits for those customers through credit limit adjustments.
  • Create blocking rules that put an order on hold during one or more posting processes, based on factors such as risk, payment terms, credit limits, overdue amounts, and the percentage of the credit limit that has been used.
  • Manage a list of sales orders that are on hold, review the reasons for the hold, and mitigate issues.
  • Release sales orders so that they continue through the posting process.
  • Set up a workflow to manage the approval of credit limit changes and sales order releases.

Pre-Requites: This feature is available after version 10.0.9, and we need to enable from feature management.

Once you enable you will have addition menu items available under Credit and collection module.

Now in this we will understand following options available as part of Credit management once you enable.

  1. Workflow

We have three additional workflows which are available as part of credit management.

  • You can create a workflow that lets you approve a batch of credit limits adjustments through a single approval.
  • You can add a workflow at the line level, so that credit limit adjustments can be approved individually.
  • You can create a release workflow that automatically routes holds to a workflow process
  1. Account Status, Credit management Reasons and Credit management groups
  1. Account status

Credit and collections > Setup> Credit management setup > Account statuses

You can create account statuses to identify the credit standing of a customer account. You can define a status and its effect on the invoicing and delivery on-hold processes. Account statuses can also be used to determine blocking rules for a customer

  1. Credit Management Reasons

Credit and collections > Setup > Credit management setup > Credit management reasons

  1. Hold reasons indicate why a sales order was put on hold.
    1. Release reasons are assigned to an order when it’s released from hold.
    1. Status reasons indicate why an account status was assigned to a customer.

3. Credit Management Groups

Credit management groups are used to identify customers or groups of customers that have the same credit management properties. For example, credit management groups can be used to determine the blocking and exclusion credit management rules for customers

Credit and collections > Setup> Credit management setup > Credit management groups

  1. Customer Credit Groups

Credit management > Customer credit groups > Customer credit groups

You can define groups of customers who have a shared credit limit. The individual credit limit that is defined on the customer invoice account is also considered.

Members of a customer credit group can be selected from different legal entities. When you add a customer to the list of customers in the customer credit group, the expiration date of the credit limit for each customer is changed to the expiration date that is assigned to the group.

  1. Credit Limit adjustment

            Credit management > Credit limit adjustments > Credit limit adjustments

Credit limit adjustments let credit managers update the credit limits and expiration dates of a single customer, a group of customers, or all customers through a posting process. You can add credit limit adjustment entries to update customers and customer credit groups, or you can use them to calculate automatic credit limits. The entries can then be reviewed, sent for approval through a workflow, and posted to customer accounts.

  1. Credit Management Parameters

That’s it for this blog, we will explore few more terminologies in next parts.

Thank You!!! Keep reading and sharing!!!


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