Contracts and Customer Credit
Contracts are a type of sales order and follow most of the billing rules for sales orders. If the customer bill-to on the contract header is on credit hold, Credit Hold Option and Use Action Status in SO Accounting Control in SSM Accounting Control determine processing. This field can have one of three values:
0. Contracts can be created regardless of the customer’s credit status.
1. Contracts can be created, but a warning displays and the system sets the contract’s action status to hold.
2. Contracts cannot be created for customers who are on credit hold or who are over their credit limit. An error message displays, and you cannot create the contract until you set Credit Hold to No in Customer Create.
With this setting, when the contract line being entered puts the customer balance over the credit limit, the system does not prevent you from completing the request. This is because the credit limit is not actually exceeded until the order line is complete. Instead, the system accepts the service contract, displays a warning message, and places the resulting document on credit hold.
To remove credit holds, update the Action Status field in Contract Maintenance.
Note: Credit hold status is checked for the header bill-to address only, regardless of the setting of Bill End Users.