Configure the credit restriction

You can use a credit restriction. Credit restriction is a negative discount to bear the costs of the credit period. If the sales contact pays on time, he can deduct the surcharge. Credit restriction is something different from payment discount. You use credit restriction to make customers pay quickly. This will benefit your cash flow, and at the same time save you time and effort otherwise spent on collecting payments. There is no legal obligation to actually pay the credit restriction, even if payment is made after the due date. Credit restriction is only invoked to limit the costs involved in invoice collections (interest, etc.).

The surcharge is a percentage of the total amount exclusive of VAT, minus the invoice discount. You can deviate from this by specifying if you want to calculate the credit restriction on the VAT calculation basis amounts. You can also specify that you want to calculate the credit restriction on the amount inclusive of VAT.

Example:

Profit calculates the credit restriction on the total amount exclusive of VAT, minus the invoice discount.

Activate functionality

You activate the Credit restriction functionality.

Ideally you should activate the new functionality at the end of the working day, or over the weekend. This is because during the activation process, a conversion will always occur, and during this conversion your employees cannot work in Profit. It is recommended that you first test a new activation in a test environment, before you implement it in the live environment.

To activate the functionality:

1. Go to: General / Environment / Management / Properties.
2. Go to the tab: Activation.
3. Select the check box of the functionality that you want to activate.

   Profit warns you that after activating the functionality the environment needs to be converted.

4. Click on: Yes to activate the function.
5. Click on: OK.

   Profit warns you that no other users can be logged on.

6. Click on Yes in the message.

Configure the integration type

You configure the credit restriction for each integration type. For each integration type, you can set a deviating number of days.

To configure the integration type:

1. Go to: General / Configuration / Integration settings / Integration type.
2. Open the properties of integration type Order management sales invoices.
3. Go to the tab: General.
4. Select the Use of credit restriction check box.
5. Enter a value in Days credit restriction﷓.

   You can print this number of days on the invoice layout.

   You do not select a ledger account because it is not being journalised. The payment discount is only passed along with the outstanding item.

6. Click on: OK.

Record the credit restriction rate

You record the percentage of the credit restriction per sales contact.

To record the credit restriction rate:

1. Go to:
   • Financial / Debtor / Debtor.
   • Order Management / Sales / Sales contact.
2. Open the properties of the debtor.
3. Go to the tab: Price/discount.
4. Enter a value inCredit restriction (%).

   This percentage is copied over when adding orders for the sales contact. You can still change the credit restriction rate in the order.

5. Click on: OK.

Record the credit restriction account

You select the ledger account for the credit restriction in the administration settings.

To record an account:

1. Go to: Financial / Management / Administration settings.
2. Go to the tab: Payment differences.
3. Select the ledger account in Credit restr. debtor account.
4. Select the ledger account in Credit restr. creditor account.
5. Click on: OK.

Set inclusive of VAT for credit restriction.

The credit restriction calculation basis including VAT for the credit restriction can be selected in the Logistics settings if you want to calculate the credit restriction on the amount inclusive of VAT. If you do not set this, Profit automatically calculates the payment discount over the amount exclusive of VAT.

To record an account:

1. Go to: Order Management / Management / Settings.
2. Go to the tab: General.
3. Select the Credit restriction calculation basis incl. VAT check box if you want to calculate the credit restriction on the amount incl. VAT.
4. Click on: OK.