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Understanding difference between Credit Hold & Credit Check

Posted on May 3rd, 2010 by Sanjit Anand ||Email This Post Email This Post

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Oracle EBS Credit Hold is the ability to place ALL customer orders on hold immediately regardless of customer credit limits or exposure or credit risk.

When the user enables credit hold on a customer or customer site, all orders are placed on hold immediately to prevent further processing. If a user enters a new order it will go immediately on hold and will not book or progress further.

This is used by Receivables Departments when a customer is an immediate risk to prevent any order processing for a specific customer bill-to site, or specific customer


Oracle EBS AR or OM analysts can enable Credit Hold by querying the Customer Record.

Navigation should be Customer -> Standard. Once setup done , this will prevent the sales orders from booking.

If Credit Hold needs to be applied at the Customer Level enable the check box Credit Hold. You need to flag this at Profile: Transaction.

If Credit Hold needs to be applied at the Bill-to Level. Select Addresses and select Bill-to then enable the check box Credit Hold.

When the credit hold check box is enabled a hold source is created that places all current and future orders on hold irregardless of credit limits.

When the credit hold check box is disabled, the hold source is removed and the orders will progress.

If credit hold is enabled at the Bill-to Site, lines with this bill-to are placed on hold. The order can still be booked if the profile option OM: Prevent Booking for Line Generic Holds is set to No.


You can esaily achieved this by simply putting $0.00 in the profile amounts on the customer header, does not stop an order from being created. That mean when a customer account is on credit hold, you can still create new sales orders for that customer in Oracle Order Management

However, all new orders will have a status of ‘on hold’ and orders cannot be booked or shipped until the hold on the customer account is removed

A hold will automatically be place on a customer under the following conditions:

  1. ‘Credit Check’ must be selected for both the Payment Term and Order Type for the related customer
  2. The customers credit limit must = $0.00 or the customer must have exceeded their limit
  3. Alternatively, the customer can manually be placed on Credit Hold by selecting the Credit Hold check box

There is another term called Credit Check , which Often confuse . Have a detail look.


Credit Check is is used during the Order Life Cycle to verify customer credit worthiness.

EBS credit check functionality requires setting up credit limits and assigning credit check rules to determine the exposure of the specific customer based on a series of parameters such as open uninvoiced orders, past due invoices, shipping horizon days against credit limit.

If the customer exceeds set credit limits, total exposure or has past due invoices, the orders will be placed on hold.

Oracle EBS Credit Check can be done at Order Booking, Pick or Purchase Release, Packing and Shipping.


Enabling this feature for credit check , you can do at following level:

  1. Item category level
  2. Bill To Site level
  3. Customer level ONLY if the Bill-to Site is enabled as well
  4. Party level (Remember if Option/level is only used if have Credit Management is installed.)
  5. Operating Unit Default level

You can define credit Limits defined at one of the above specified Levels.

There are two credit limits, the order credit limit and the credit limit. The credit limit if null is assumed to be unlimited.

The credit limit specifies the maximum value of exposure that the Customer is allowed.

The order credit limit if null assumes there is no maximum value per order. If specified is the maximum value of an order that can be placed.

For example if the Order Limit is $500 and a customer places an order for $505 the order will be placed on Check Failure Hold regardless of the credit exposure.

Once Credit Check is enabled on the customer at the level needed and credit limits are defined, credit check must be enabled on the Payment Terms Record.

The Credit Check Rule defined must be included in the transaction type used when placing an Order. Main Tab > Credit Check Rule area

The Credit Check Rule (same credit check rule, or different credit check rules) can be defined for the following four (4) phases:

  • Ordering
  • Picking/Purchase Release
  • Packing
  • Shipping

Hope this helps.

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