In NetSuite, credit limits and customer deposits are two distinct aspects of managing customer accounts.
Credit Limits:
A credit limit is the maximum amount of credit that a customer is allowed to have outstanding at any given time. It’s a way to manage and control the risk of customers exceeding their authorized credit.
Setting Credit Limits: Credit limits are typically set on the customer record. You can specify a credit limit amount, and NetSuite can be configured to enforce this limit by preventing the creation or approval of sales orders or invoices that would exceed the established limit.
Alerts and Notifications: NetSuite can be configured to send alerts or notifications when a customer is approaching or has exceeded their credit limit. This helps in proactive credit management.
Customer Deposits:
Customer deposits are prepayments made by customers before goods or services are delivered. These deposits are often required for custom orders, large purchases, or to secure a place in a queue.
Recording Deposits: In NetSuite, you can record customer deposits using transactions such as Sales Orders or Customer Payments. When a customer pays a deposit, it creates a liability on your books until the corresponding goods or services are delivered.
Applying Deposits: When the final product or service is delivered, you can apply the customer deposit to the corresponding invoice, reducing the amount owed by the customer.
Application of Deposits:
When the final product or service is provided, you can apply the customer deposit to the corresponding invoice. This reduces the amount owed by the customer but does not impact the credit limit directly.