Most businesses provide credit to their customers for more sales. There is a high chance for a customer to buy from you if you provide credit to them. In the short term, this might lead to a cash crunch but in the long term can help you to retain the customer leading to more revenue.
In Odoo 16, a new feature to set credit limits has been added. The credit limit is used to set the maximum amount that a customer can owe to the company. This helps to control the risk of non-payment and prevent the customer from accumulating too much debt. The credit limit can be set as a global limit and the limit can also be changed for individual customers.
One thing to keep in mind is that even if the credit limit is enabled, it will only be a warning and won’t restrict the creation of sale orders or invoices. The warning will be shown while creating a sales order or invoice.
Below are the steps to set up the Credit Limit feature in Odoo 16
- Enable credit limit from the Accounting Settings. Enter an amount which should be set as a global limit. This will be applicable for all customers.
- If you need a customer-wise credit limit, it can be enabled from the customer master and the limit for each customer can be set like below
- When you create an invoice and the credit limit of the customer has been reached or exceeded the given amount, it will show a warning.
- The same warning will also be shown while creating the quotation.
We have seen how to enable and configure the credit limit in Odoo 16. So how is the due calculated? The total amount due is the total receivables of that particular customer. Odoo dynamically calculates the total receivables of each customer so that a credit limit warning can be shown while creating invoices or quotations.
Do you need more customization on this credit limit feature? We at Hynsys Technologies can help you to achieve more with our experienced developers and consultants to get more out of this feature. Contact us if you have anything specific in your mind.