You can use credit limits and credit holds to manage the amount of credit you extend to customers.
A credit limit defines the maximum currency amount the customer is allowed to accrue in outstanding receivables. A credit hold blocks entry of a transaction if the customer's credit limit has been reached.
Credit holds are also applied when customers are delinquent in making payments. You can define a grace period after the due date of invoices. Then, once the grace period has passed, customers are unable to place new orders on terms until they have paid their overdue invoices.
When using the Credit Limit functionality in NetSuite, the system won't let you create or edit a customer's transaction if he is on Credit Hold. This is done to avoid bypassing the Credit Limit by adding new items to existing transactions. Since there are several cases where this restriction needs to be bypassed, NetSuite offers some options to work around the Credit Hold:
- There is a company-wide setting (found at Setup > Accounting > Accounting Preferences > General Tab) that allows you to enforce, warn of or ignore credit holds.
- The setting mentioned above can be overwritten by users by going to Home > Set Preferences > Transactions Tab. This must be allowed by administrators by checking Allow Override for Customer Credit Limit Handling at Setup > Company > General Preferences.
- Regardless of the aforementioned preferences, there is a hidden flag called "credholdoverride" on transactions that can be set through scripting to bypass the credit hold.