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 relationship:

You set a credit limit. Each customer has a credit limit on their accounting profile. 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. Over-limit customers are highlighted on accounting and shipment screens so staff can see the exposure while they work.
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 your organization has enabled automatic holds. While a customer is on hold, their shipments cannot be advanced into the billable stages of the shipment lifecycle.

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. When a specific shipment needs to proceed despite the hold, staff can record a one-time bypass for that shipment so it alone can move forward.

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.
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 always flags the customer on the relevant screens. Whether exceeding the limit also automatically places the customer on a credit hold depends on your organization enabling automatic holds; 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.
A single shipment can be released from a hold. Staff can record a one-time bypass on a specific shipment so it can move forward even though the customer is on hold, without lifting the hold for the customer's other shipments.
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.

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 and highlights that on the accounting and shipment screens. If your organization has enabled automatic credit holds, exceeding the limit can also place 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 credit hold prevents a held customer's 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. The hold specifically blocks forward progress into the stages where the customer would be billed.

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

Yes, on a case-by-case basis. In the Tai TMS, staff can record a one-time bypass for a specific shipment so that shipment can advance even though the customer is on hold. The bypass applies only to that shipment and does not lift the hold for the customer's other shipments.

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.