LT
Credit limit module - control the risk of insolvency
This module is designed to set a credit limit for clients.
Problem:
Most companies, when deciding whether to accept an order from a client or not, base the assessment of (in)solvency solely on the unpaid invoice amount.
owever, sometimes, it might be that there are already many orders placed and many invoices for which the payment deadline has passed unnoticed by the company.
The Credit Limit module takes that into consideration.
Benefits:
If the credit limit is exceeded, InfoTrans system will not allow to create any new orders on the client.
Every company's credit limit calculation is based on this forumula:
Orders without invoices + Invoices not overdue + Overdue invoices - Reciprocal debts for client/haulier
Simplified example on how the module works:
| Amount of overdue invoices | 5 000 |
| Amount of invoices not overdue | 15 000 |
| Orders without invoices | 30 000 |
| Credit limit: | 55 000 |
| Final credit limit: | 5 000 |
Good practice or how other companies deal with insolvancies:
- Management fills all the necessary information about a new client .
- Legal expert verifies the information on client's solvency and enters the credit limit.
- Can be implemented if you are using our RIghts module and the authority to enter credit limit information is granted exclusively for the legal expert.
For more information, please do not hesitate reaching out to us - help@infotransport.eu