[MUSIC]
Erick Weitkamp: In this video, we'll focus on the updates
to credit management in the 2020 wave 1 update.
Credit management provides you with more information and
control over your customer's credit limits, including the
use of risk scores to help set credit limits.
You can then implement a set of nine configurable rules
that look at the customer's credit position, risk level,
and other attributes that you select to automatically
place holds on out of compliance orders.
Finally, you can manage the holds, identify the issues
and release the orders automatically after the hold issues
have been resolved.
The credit management updates in Dynamics 365 Finance
wave 1 starts with the addition of around 20 new fields to
securely store customer information, including long term
and temporary credit limits, insurance and guarantees,
risk scores, and of course credit status.
This data allows you to manage the risks, credit limits,
holds and releases for a variety of reasons.
Let's see how this works.
We'll start with a customer Contoso Retail of Los Angeles
and take a look at the new information that's available to
help you manage their credit.
As you can see, there's a lot more data available to you.
For Contoso Retail, we've decided to add them to credit
management.
And we've set both long term and temporary credit limits.
The key information is in the credit limit column.
Contoso has a $500,000 limit and a temporary credit limit
of $250,000 with an expiration date.
This temporary credit limit allows you to support short
term situations like calendar events or product sales
without impacting the long term credit limits.
You can also add insurance and guarantees
to their credit limit.
In this case, we have insurance,
so we'll add 20% to the credit limit.
And here, you can see the limit jump up.
Additionally, we have a credit limit expiration date that
gives you a trigger point for an automated credit review
workflow.
We also have a risk section where you define what
constitutes as a credit risk.
This section allows you to quantify the overall risk of
extending credit to Contoso Retail.
Right now, it's showing a low risk.
As you can also see here, Contoso Retail of Los Angeles is
presently on a credit hold for other reasons.
Customer credit adjustments let you manage credit limits
and control the flow of sales orders through the posting
process based on credit and risk rules that you create.
The process starts by setting, weighting, and updating
credit attributes for your customers, including customer
history, risk scores, and credit groups.
From this data, you create and manage your customer's
credit limits based on your business requirements.
Let's see how this works.
We start by defining the attributes that we consider
measures of risk, such as Contoso's average balance,
the average days to payment, their Dunn and
Bradstreet scores, etc.
Let's take a close look at the number of years in business
risk attribute that we've defined for our customers.
We're saying that less than five years in business adds
ten points to the risk score, while more than ten years
has no impact.
Well, Contoso's been in business for 16 years, so no risk
impact here.
We add up all these contributions to risk and come up with
a risk score for Contoso Retail of 12.5, which translates
into a low risk group.
This is their individual company risk level.
With customer credit groups, you can manage credit limits
at a larger scale to limit your exposure across multiple
companies.
In this case, we have the Contoso customer's credit group.
This credit group has a million dollar credit limit, even
though adding up the individual credit limits might give
you a higher value of say two or three million dollars.
If Contoso gives us an order for say $600,000, Dynamics 365
Finance would check at the group level first and if it
passes, check again at the individual company level.
This credit group limits our combined exposure from all of
the Contoso companies.
Once you've set credit limits, you create blocking rules
that determine how and when to put an order on hold during
the posting process.
There are nine blocking rules that you can configure to
stop an order.
These rules are based on factors, such as credit limits
and business risks that we've discussed as well as payment
terms, overdue amounts, and the percentage of the credit
limit that's been used.
Let's take a look at how this works.
From the credit and collections page, we select blocking
rules.
And seven rules show up here.
You can block a shipment based on any or all of these
rules and you adjust how to apply these rules.
Let's look closer at days overdue.
You can set an overall blocking rule, in this case, 20
days overdue.
And you can be more granular and set rules based on
attributes, including company groups and risk categories.
In the next two rows here, you can see that low risk
companies also have 20 days, where high risk companies who
are even one day overdue are blocked immediately.
The other blocking rules can be adjusted in the same way.
As you can see, we are presently blocking if the account
is on hold, cash, or COD, if their credit has expired, if
they're overdue, if their sales order is above a half
million or if the credit limit has been used.
We may also block based on payment terms or settlement
discounts.
The key here is that you set the blocking rules, so they
make sense for your company at the individual, group, or
all customer level, and then you adjust them as needed.
Once you've set credit limits, the next question is, when
in the process to review credit limits to resolve any
issues and when to actually stop new orders with the
blocking rules.
To set this up, you go into the credit limit parameters
screen and select when and how often you want to stop the
order at confirmation, at picking list, or even at the
packing slip point when it's sitting on the loading dock
ready to go out.
Depending on your business, you may want to select just
one or all of these checkpoints.
And you can set grace days so that the order doesn't get
repeatedly held up for the same issue as it moves through
your process.
You've seen how to put a sales order on hold based on
customer history and the nine configurable blocking rules
that look at the customer's credit and risk position.
Once the data and rules are in place, order holds will go
on automatically.
The last step them is to manage the holds manually or set
up a workflow to automate the sales order release.
You can even release sales orders so that they continue
through the posting process while you work through the
issues that created the hold.
Let's see how all this works.
We'll start the process by forcing the review of a sales
order.
Normally, this would be handled by Dynamics 365 Finance
and an automated business workflow.
In the hold list, you see that this order was blocked and
the list of reasons that it was blocked.
In this case, everything that could go wrong with this
order did go wrong.
If this had happened in real life, these blocks would've
each triggered different workflows to let the appropriate
people know the problems with this order.
Now that we've identified these issues, you can fix them,
you can reject the order, and let the owner resolve these
issues, or you can release the order.
If you decide to release it, you can do so without
posting, which forces the sales order clerk to reconfirm
the order or with posting, where you are both releasing
the hold and confirming the order.
And that takes us back to the main page for Dynamics 365
Finance.
As you have seen, credit management in the 2020 wave 1
update provides you with more information and control over
your customers' credit limits.
It gives you configurable hold rules that look to the
customer's credit position, risk level, and other
attributes that you select.
You can manage the holds and then release the orders
automatically after the issues have been resolved.
[MUSIC] For more information, use these specific links or
go to the release overview guide.
