The Limit Is Checked When the Invoice Is Written
A credit limit is evaluated at exactly one moment: when an invoice is written or rewritten. What it compares, what it snapshots onto the invoice, and what it silently clears are all worth knowing before you rely on it.
A credit limit of zero does not mean this customer gets no credit. It means this customer has no limit.
That is the first thing to know and it catches people, because zero reads as a restriction and behaves as an absence. The check begins by asking whether a limit greater than zero has been set; if not, it returns immediately with no hold, no reason and nothing to review. Every customer in a ledger where nobody has set limits is in that state.
What the exposure is made of
Where a limit is set, the calculation is short and worth being able to reproduce by hand.
An invoice being written for 180,000
The invoice is saved on hold rather than refused, with the amount it is over by recorded on it. Somebody then reviews or overrides it.
Cancelled and paid are excluded; everything else counts
The exposure sums invoices that still carry a balance and are not cancelled or paid. A draft counts. An invoice already on credit hold counts. That is the conservative reading and it is the right one — an unpaid document is exposure whatever stage of your process it has reached.
Three figures are written onto the invoice
This is the part that makes the control auditable rather than merely functional. When the evaluation runs, the invoice records the limit that applied, the exposure before it and the exposure after it. Where a hold is raised, it also records the amount over and the reason in words.
So a hold from four months ago can be explained without reconstructing the ledger as it stood that day. The customer's limit may have moved since, other invoices may have been paid, and none of that changes what this invoice recorded at the moment it was written. That is the difference between a control you can defend and a control you can only observe.
A snapshot answers the question. A recalculation answers a different one.
An edit re-evaluates, and clears the override
Rewriting an invoice runs the whole evaluation again, with one adjustment: the invoice being edited is excluded from its own exposure. Without that, an invoice would be measured against a total that already included it, and every edit would look like a doubling.
The re-evaluation also clears any override that had been applied — the moment, the person and the reason are all reset. That is deliberate and it is the correct behaviour: an override was a decision about a specific amount, and once the amount changes, the decision has not been made about the new one. It does mean that editing an invoice somebody released from hold sends it back for release again, which is worth knowing before you edit rather than after.
Editing is restricted to drafts, and that restriction has its own history. The update path used to force the status back to draft unconditionally, which meant an approved invoice edited directly by its address came back a draft. The guard now stops anything but a draft reaching that code, and the demotion line was deliberately left in place as a no-op — so that if the guard is ever widened, whoever widens it meets the problem rather than inheriting it silently.
What the control does not do
It is checked when an invoice is written. Not when an order is taken, not when goods are picked, and not when a delivery leaves. For a business that invoices at the point of sale those are the same moment. For one that takes an order today, delivers next week and invoices at month end, they are three different moments, and the limit is enforced at the last of them — after the goods have gone.
You invoice at the point of sale
The control fires where you need it
Invoice and delivery are one event, so a hold stops the transaction. Set limits and rely on it.
You deliver first and invoice later
Check exposure before dispatch, manually
The exposure figures are visible on the customer, and the check at invoicing is the backstop rather than the gate. Knowing which is which prevents an unpleasant surprise at month end.
Nobody has set any limits
Every customer is unlimited
A limit of zero or unset returns no hold. If you believe you have a credit control policy and no limits are set, you have a reporting feature rather than a control.
You want a hold to be hard to release
Look at who holds the release permission
The hold is recorded with the amount and the reason; who may lift it is a permissions question, and it should not be the same person who raised the invoice.
Five questions to ask about a credit limit
When is the limit checked?
A good answer sounds like
A named moment.
What ours actually is
When an invoice is created and when a draft invoice is rewritten. Four call sites, one implementation.
What counts towards the exposure?
A good answer sounds like
A named set.
What ours actually is
The customer's stored opening balance plus every invoice still carrying a balance that is not cancelled or paid.
What does a limit of zero mean?
A good answer sounds like
An unambiguous answer.
What ours actually is
No limit. The check returns immediately with no hold — zero is an absence, not a restriction.
Is the decision recorded?
A good answer sounds like
On the document.
What ours actually is
The limit, the exposure before, the exposure after, the amount over and the reason are all written onto the invoice.
What happens to an override when the invoice changes?
A good answer sounds like
It is cleared.
What ours actually is
Cleared — the moment, the person and the reason are reset, because the decision was about the old amount.
What AWRA OpsHub does today
- A credit limit per customer, evaluated whenever an invoice is created or a draft is rewritten, through one implementation shared by the web and interface paths.
- An exposure made of the customer's stored opening balance plus every invoice still carrying a balance that is not cancelled or paid.
- An invoice placed on credit hold rather than refused, so the document exists and the decision is visible rather than the sale simply failing.
- The limit that applied, the exposure before and the exposure after all snapshot onto the invoice, so a hold can be explained months later without reconstructing the ledger.
- The amount over the limit and a written reason recorded on any invoice placed on hold.
- The invoice being edited excluded from its own exposure, so an edit is not measured against a total that already contains it.
- An override cleared on re-evaluation, so a release granted for one amount does not carry over to a different one.
- Editing restricted to draft invoices, after a demotion path that used to turn an approved invoice back into a draft.
More we can add to your workspace
- A limit checked at order or dispatch, so a business that delivers before invoicing meets the control before the goods leave.
- A distinction between no limit and a limit of zero, so a customer can be put on strictly cash terms rather than treated as unlimited.
- Ageing in the exposure, weighting a ninety-day balance differently from one raised this morning.
- A temporary limit with an expiry date, for the seasonal uplift that everybody grants and nobody remembers to take back.
- A hold released with an approval rather than an edit, so the release is a decision by a named person with its own record rather than a field change.
- A credit exposure view per customer, showing the same figures the check uses, before anybody raises an invoice.
Where we point you to a specialist
- We will not refuse the invoice outright. Placing it on hold keeps the document, the amount and the reason on the record where a credit controller can act on them; a refusal at the point of saving loses all three and pushes the sale into somebody's notebook.
- Setting a customer's credit limit is a commercial judgement about that relationship and stays with you. We will hold the number, apply it consistently and record what it was when a decision was taken; deriving it from payment history would be advice about who to trust.
- Where a regulator or a funder prescribes credit terms for your sector, that prescription governs and your advisers own it. We will configure limits and holds to match whatever they require.
A credit exposure view per customer is the smallest useful piece here — the calculation already exists and already runs, and surfacing it before an invoice is raised is what turns a backstop into a control somebody can act on.
Moving the check earlier
The evaluation, the snapshot and the hold all work. What decides whether they protect you is where in your process the check happens, and that is where the scoping conversation usually goes.
A check before dispatch
The same evaluation run when goods are picked or released, so a business that invoices at month end meets the limit before the stock leaves.
A true zero-credit setting
A way to say strictly cash terms, distinct from having no limit at all.
A release with a name on it
Lifting a hold as an approval by a named person with its own record, rather than as a field somebody changes.
We publish scope, not dates.
Scope credit controlOur take
The mechanics here are better than most: one implementation behind four entry points, a hold rather than a refusal, and — the part that genuinely distinguishes it — the limit and both exposure figures written onto the invoice so a decision can be explained rather than merely observed. Two things decide whether it protects you in practice, and neither is about the code. The first is whether limits are set at all, because zero means unlimited and an unset field is the default state of every customer ever created quickly at a counter. The second is where the check sits in your process: if you deliver before you invoice, this is a backstop that fires after the goods have gone, and treating it as a gate is the mistake worth avoiding. Set the limits, know which of the two you have, and it does the rest well.
Count how many of your customers have a limit
It is one filter on the customer list and it is usually a shorter number than people expect. Every customer without one is unlimited, and that is the whole state of your credit control until it changes.
Talk through credit limitsFrequently asked questions
Why does a credit limit of zero mean no limit?
Because the check treats any limit that is not greater than zero as an instruction that there is nothing to enforce, and returns immediately. That covers both a customer nobody has set a limit for and one where somebody typed zero meaning "no credit". The two situations are indistinguishable to the calculation, which is why a genuine cash-only setting is a separate thing to ask for.
Does a draft invoice count towards a customer's exposure?
Yes. The exposure includes every invoice carrying a balance that is not cancelled or paid, and a draft carrying a balance is included. That is the conservative reading and the right one — an unpaid document represents exposure whatever stage of your internal process it is at.
Why does my invoice go back on hold after I edit it?
Because editing re-runs the whole evaluation and clears any override that had been applied. An override was a decision about a specific amount, and once the amount changes, nobody has yet made that decision about the new one. It is worth knowing before you edit a released invoice rather than after.
Where does the opening balance come from?
A stored field on the customer record, written when somebody creates or edits the customer by hand. It is the base of this calculation, and everything above it is summed from live invoices. Whether that field reflects your customer's true starting position is a data question rather than a calculation one, and it is worth checking on any ledger migrated from another system.
Can the limit stop a delivery rather than an invoice?
Not today. The evaluation runs when an invoice is written, so for a business that invoices at the point of sale it is a gate, and for one that delivers first and invoices at month end it is a backstop. Running the same check at picking or release is the change that moves it earlier, and it is the item most asked for by wholesalers.
Who can release a hold?
Whoever holds the permission to act on the invoice. The release is recorded with a moment, a person and a reason, and those three are cleared if the invoice is subsequently edited. Making the release an approval in its own right — rather than a change somebody makes on the record — is the item on the list above that separates a recorded release from a controlled one.
