Every month we publish a "feature of the month" where we ask one of our consultants to highlight a feature in MILAS AX (our specific ERP modules for Microsoft Dynamics AX). This month Bartek Cach shares his insights.

Any company knows what it's like to be confronted with customers who are reluctant to pay. This leads to struggles with the accounts receivable, slowing down cash flows and harming the bottom line. Consequently, companies aim, more and more, to proactively diminish the number of unpaid (or late) invoices by setting up credit limit controls. As the saying goes, “prevention is better than cure”.

Credit limit control in MILAS AX

MILAS AX supports this proactive controlling by blocking the confirmation of sales orders if credit limits have been surpassed or a customer has more older unpaid invoices than allowed. You can set-up the “credit limit control” and “days of grace” to your own needs:

• You can set up credit limits for all your customers or do this solely for a limited set of customers. Moreover, you can opt to put deliveries on hold.
• You can choose to check the remaining credit limit against:
  • the customer balance
  • the customer balance and all delivered orders
  • the customers’ balance and all delivered and undelivered orders
• You can set up a number of “days of grace” as well. With that feature the order can be blocked even if the customer is within its credit limit, but has unpaid invoices that are too old.

The process

Let’s take an example to illustrate this feature in MILAS AX:

• Your sales responsible creates a new sales order. When confirming the order, he/she gets an error (or a warning; it’s up to you) since the credit limit has been surpassed by X-EUR. The order is blocked now and cannot be processed further.

• The user, who is responsible for credit control, sees the blocked order in his/her role center (credit exceeded orders).
• This person can determine to release the orders or leave it blocked. In MILAS AX, he/she can obtain an overview of all blocked orders with one simple click. With the proper information at hand, this responsible staff member can decide to continue or suspend the sales-order process.
• To support the unblocking decision, an unambiguous overview of the customers’ balances can be consulted straightforwardly.
• The released order will go into the normal workflow (production, shipment, delivery, …) automatically.

Conclusion

Since the total number of outstanding invoices has accelerated in most sectors, and every invoice represents cash, organisations aim to block the sales-order process for certain customers. To support the credit-limit control, MILAS AX provides a structured, flexible and user-friendly tool, which helps your organisation to secure a healthy cash flow.