Customer Credit Limits and Credit Holds

This article explains how the Tai TMS tracks a customer's credit exposure against a credit limit, what counts toward that exposure, and what happens when a customer goes over the limit or is placed on a credit hold.

Overview

The Tai TMS lets you set a credit limit for each customer so you can control how much a customer can owe you at once. The system continuously adds up what the customer already owes and compares it to their limit. Importantly, exposure is not just unpaid invoices — it also includes the value of shipments already moving that have not been invoiced yet, so you see the customer's real, in-flight risk rather than only what has been billed. When a customer's total exposure passes their limit, the system flags them, and — depending on your setup — can place the customer on a credit hold that stops new shipments from moving forward until the situation is addressed.

How it works

Credit tracking runs against each customer's billing profile with a billing organization. A customer that does business with more than one billing organization has a separate limit, balance, and hold status with each one.

You set a credit limit. Each customer's billing profile has a Credit Limit and a Credit Status (Cash, Credit Approved, One Order at a Time, Continual Credit Card, Credit Hold, or Collections). A limit of zero (or no limit) means no credit ceiling is enforced for that customer.
The system totals the customer's exposure. The Tai TMS adds together two things: the unpaid balance on the customer's invoices that are not yet fully paid, and the value of the customer's shipments that are in flight but not yet invoiced (shipments from the point they are ready through delivery). The sum is the customer's total balance.
It compares balance to limit. If a credit limit is set and the total balance exceeds it, the customer is flagged as over their credit limit. The Collections Summary and the customer's organization page show the over-limit flag using the full balance (unpaid invoices plus in-flight shipments). The red dollar-sign markers on shipment lists, the organization list, and accounting shipment search ("Over Credit Limit" or "Payer Over Credit Limit") compare only the customer's unpaid invoice balance to the limit, so a customer who is over the limit only because of in-flight shipments can show as over-limit on the Collections Summary, and be auto-held, before the marker appears on those lists. When the billing organization has Auto Apply Credit Hold turned on, a shipment created while its customer is over the limit also gets a Credit Limit Exceeded alert.
A credit hold can stop shipments. A customer can be placed on a credit hold — either manually by staff, or automatically when they exceed their limit if the billing organization has turned on Auto Apply Credit Hold. A customer is auto-held only if they are a customer (not another type of organization). The system re-checks a customer's exposure when one of their shipments is created, changes status, or changes price.

There are two related controls, and a hold can involve both:

Credit Status set to Credit Hold on the customer's billing profile. This is what stops shipments from moving forward. While it is in place, the customer's shipments cannot be advanced into the billable stages of the shipment lifecycle.
A Credit Holds list entry. Staff manage these on the Credit Holds screen, where each entry is for a customer, optionally for one tariff owner, with notes and an Active on/off setting. An active entry stops rating: with no tariff owner named, the customer gets no tariff rates at all and rating returns "No rates are available due to credit status"; with a tariff owner named, only that owner's tariffs are removed from the customer's rates. Setting a customer's Credit Status to Credit Hold adds an active entry automatically, and changing the Credit Status away from Credit Hold removes the customer's all-tariffs entry. Deleting an entry on the Credit Holds screen removes only that entry; it does not change the customer's Credit Status.

A credit hold does not freeze everything. Shipments for a held customer can still be created and worked in the early stages, and a shipment can always be canceled. What the hold prevents is moving a shipment forward into the accountable (billable) stages while the customer is on hold. If the customer books a shipment that would start in a billable stage, the shipment is created but its status is not advanced, and a private note records that the attempt was blocked because the customer is on credit hold. If a carrier tries to confirm a load that the hold blocks, the carrier is told the shipment is no longer available for confirmation and to contact the broker.

When a shipment is the one that pushes a customer over the limit and triggers an automatic hold, that one shipment is exempted from the hold so it can keep moving; the customer's other shipments are held.

Business rules & limits

Exposure includes shipments in flight, not just invoices. A customer's credit exposure is the unpaid portion of their not-fully-paid invoices plus the value of their shipments that are moving but not yet invoiced. This means a customer can be over their limit even if their invoiced balance alone is under it.
Exposure is per billing organization. The balance and the limit are calculated for the customer's relationship with each billing organization separately.
A limit of zero means no limit is enforced. Credit checking only applies when a customer has a credit limit greater than zero. Customers with no limit set are not flagged as over-limit.
Over-limit customers are flagged, and can be auto-held. Exceeding the limit flags the customer on the relevant screens. The automatic hold and the Collections Summary use the full balance (invoices plus in-flight shipments); the shipment-list and organization-list markers use the unpaid invoice balance only. Whether exceeding the limit also automatically places the customer on a credit hold depends on the billing organization having Auto Apply Credit Hold turned on; otherwise a hold is applied manually by staff.
A credit hold blocks forward progress, not everything. While a customer is on credit hold, their shipments cannot be advanced into the billable stages. Early-stage work on a shipment and canceling a shipment remain allowed; a shipment already in a billable stage is not pulled back by a new hold.
The shipment that triggers an automatic hold is exempt. When an automatic hold is applied because of a particular shipment, that shipment is recorded as exempt so it can continue. The exemption belongs to that one shipment; it does not lift the hold for the customer's other shipments. There is no separate staff control for exempting an individual shipment.
An automatic hold is not removed automatically. When a customer's balance later drops back under the limit, for example after a payment, the Credit Limit Exceeded alerts on their shipments are resolved, but the hold itself stays in place until staff remove it. To release shipments, staff change the customer's Credit Status away from Credit Hold.
An active Credit Holds entry blocks rating regardless of balance. The entry stops tariff rates from being returned for the customer (and for customers below them in the organization hierarchy) whether or not their balance is over the limit.
Holds are managed by staff. Placing, reviewing, and removing credit holds is a staff activity, and every change to a hold is recorded in the customer's activity history.
Balances can be briefly out of date. For performance, credit balances are cached for a short time, so a very recent payment or a brand-new shipment may not be reflected in the exposure figure for a few moments. A balance that looks slightly off is often just this timing rather than an error.
Carrier credit limits are separate. A carrier or other vendor can also have a credit limit, and the payables screens show whether the vendor's outstanding balance is within it ("Available") or over it ("Over"). That indicator is informational and does not block a payment.

Frequently asked questions

How does the Tai TMS calculate a customer's credit exposure?

In the Tai TMS, a customer's credit exposure is the sum of two amounts: the unpaid balance on their invoices that are not yet fully paid, plus the value of their shipments that are in flight (from ready through delivery) but not yet invoiced. That combined total is what the system compares against the customer's credit limit, so exposure reflects both billed and not-yet-billed activity.

What happens when a customer goes over their credit limit?

In the Tai TMS, when a customer's total exposure exceeds their credit limit, the system flags them as over-limit: the Collections Summary and the customer's organization page use the full balance, and the red dollar-sign markers on shipment lists and the organization list use the unpaid invoice balance. If the billing organization has turned on Auto Apply Credit Hold, exceeding the limit also places the customer on a credit hold automatically; otherwise staff decide whether to apply a hold.

What does a credit hold actually prevent?

In the Tai TMS, a customer's Credit Hold status prevents their shipments from being advanced into the billable stages of the shipment lifecycle. It does not stop everything — shipments can still be created and worked in the early stages, and a shipment can always be canceled. An active entry on the Credit Holds screen additionally stops tariff rates from being returned for the customer, either all of them or only those from one tariff owner.

Can a shipment still move forward while the customer is on credit hold?

Only in one case. In the Tai TMS, when an automatic hold is triggered by a particular shipment, that shipment is recorded as exempt and can continue; the exemption applies to that shipment alone and does not lift the hold for the customer's other shipments. There is no staff control to exempt another shipment. To let the rest move, staff change the customer's Credit Status away from Credit Hold (raising the credit limit by itself does not lift an existing hold).

Does the hold go away on its own when the customer pays down their balance?

No. In the Tai TMS, an automatic credit hold is not removed automatically. When a customer's balance falls back under the limit, the Credit Limit Exceeded alerts on their shipments are resolved, but the customer stays on hold until staff change their Credit Status away from Credit Hold.

What has to be true for a customer to be put on credit hold automatically?

In the Tai TMS, the billing organization must have Auto Apply Credit Hold turned on, the customer must be an organization of the customer type, and the customer's exposure must exceed a credit limit that is greater than zero. The system checks when one of the customer's shipments is created, changes status, or changes price. If any of those conditions is missing, the hold is not applied automatically.

Does setting a credit limit of zero block the customer?

No. In the Tai TMS, credit checking only applies when a customer has a credit limit greater than zero. A limit of zero (or no limit set) means no credit ceiling is enforced for that customer, so they are not flagged as over-limit and are not auto-held on that basis.

Why does a customer's credit balance sometimes look slightly out of date?

In the Tai TMS, credit balances are cached briefly for performance, so a very recent payment or a newly added shipment may take a short time to appear in the exposure figure. A balance that seems a little off is usually this normal caching delay rather than a calculation error, and it updates shortly.

Are unpaid invoices the only thing counted against the limit?

No. In the Tai TMS, unpaid invoices are only part of the exposure. The system also counts the value of the customer's shipments that are moving but not yet invoiced. Counting in-flight shipments is what lets the credit limit reflect the customer's true current risk rather than just what has already been billed.

Why do I get "No rates are available due to credit status" when quoting a customer?

In the Tai TMS, that message means the customer (or an organization above them in the hierarchy) has an active entry on the Credit Holds screen that removes every tariff rate available to them. An entry that names a tariff owner removes only that owner's tariffs, so the customer would still see other rates. Staff can turn the entry off or delete it on the Credit Holds screen.