Credit hold
Reviewed by Dasha ShakovVP Marketing, Proton
Updated
What is credit hold?
A credit hold is a block a distributor puts on a customer’s account, or on a single order, so that nothing ships until the credit department releases it. Accounts go on hold when they exceed their credit limit or have invoices too far past due.
Credit hold example
An order for $4,000 would take a customer $3,000 over its $25,000 limit, so the ERP holds it. The CSR tells the customer, who pays an overdue invoice that afternoon, and credit releases the order.
Related terms
- Credit limitA credit limit is the maximum unpaid balance a distributor allows a customer to carry on its account.
- Cash on delivery (COD)Cash on delivery (COD) is a payment arrangement in which the customer pays for an order when it is delivered or picked up, not on credit terms.
- Accounts receivable (AR)Accounts receivable (AR) is the money customers owe a company for goods already delivered and invoiced but not yet paid for.
- Days sales outstanding (DSO)Days sales outstanding (DSO) is the average number of days a company takes to collect payment after a sale.
