Credit Control Setup in Oracle EBS

 

Introduction

This document outlines the business requirement for implementing enhanced credit control logic in Oracle Order Management and Oracle Receivable modules. The objective is to prevent order creation for customers who have overdue invoices beyond an acceptable threshold, thereby minimizing credit risk and improving cash flow management.

Business Requirement

During sales order creation, the system must automatically place the sales order on hold for any customer who has one or more outstanding invoices that are two (2) or more days past due.

Solution Overview

To implement credit control using standard Oracle EBS functionality, the following configuration steps are required:

1. Define Credit Profile
2. Define Credit Rules
3. Assign Credit Rule to Transaction Type (Order Type)
4. Credit Check on Payment Terms

Order Management

Define Credit Profile

Setup à Credit à Define Credit Profiles

Define Credit Rules

Setup à Rules à Credit

In the Exposure tab enter Maximum Days Past Due = 2

Assign Credit Rule to Transaction Type

Setup à Transaction Types à Define

Payment Terms

Make sure Credit Check is checked in all Payment Terms

Setup à Transaction à Payment Terms

Receivables

Customer Setup

Customer Profile

In the Account Profile tab check ‘Credit Check’

In the Profile Amounts tab click Add Currencies button, search and select the required currency.

Set Credit Limit and Order Credit Limit 100,000,000 (or any max amount)

Click ‘Apply’ and then ‘Save’

Customer Site

Customers à Customers

Search a Customer and Click Details.

Click Details button on Site where you want to apply

In the ‘Profile’ tab, check ‘Credit Check’

In the Profile Amounts tab Click Add Currencies and add the required currency.

Set Credit Limit and Order Credit Limit 100,000,000 (or any max amount)

Click ‘Apply’ and then ‘Save’