Credit Limits In Tally

Credit Limits: Credit Limits can be specified for any account falling under the groups Sundry Debtors and Sundry Creditors. Accounts under Sundry Creditors are permitted because there can be a two-way trade with a party even if it is classified as a creditor or debtor. Classification is done on the basis of the major role.

Setting Credit Limits: If you not set credit limits, you can still make invoices and give credit periods at time of invoicing. However, that may not be desirable, especially in a decentralized environment.

Therefore, to minimise errors during invoicing, you might prefer to set these important terms beforehand.

To set Credit Limits: 

Go to Gateway of Tally-> Accounting Features-> Set Maintain Budgets and Controls to Yes 

Go to Gateway of Tally-> Accounts Info-> Ledgers-> Credit Limits (Under Multiple Ledgers) 

Select the group of Ledgers from the List of Groups for which to set credit terms. The Multi Ledger Limit Alteration screen is displayed. The List of Ledger accounts is displayed. You can set credit limits for both amounts and period here.

Credit Limit: Specify the amount of credit limit against the ledger account in this field. You can set the amount limits in foreign currency of you wish, for customers who are usually invoiced in foreign currency.

Credit Period: Credit Periods are in days only and are calculated from the effective date. If a separate effective date field appears in your voucher, the credit period is from the effective date, which might differ from the voucher date. If the voucher date is the only date field in the voucher, then it is also the effective date and the credit period is from this date.

Exceeding Credit Limits: During invoice or order entry, if the credit amount limit is exceeded, the voucher entry does not proceed further. You have two choices at this stage:

1. Enter a lower value so that the entry can be completed.

2. Abandon the current entry and obtain authorization to increase the credit amount limit in the Multi Ledger Limit Alteration screen.

This is a controlled activity and will depend on the security permissions for altering credit limits.

Single mode and Multiple mode. The Multiple mode allows you to display and alter multiple Ledgers at a time.