Customer credit inside an ERP: the balance should explain where it came from

“How much do I owe?” is a simple question.

“Why do I owe that?” is the one that tests the system.

A balance can be made up of several sales, payments, advances, credit notes, adjustments and due dates. If administration has to open several modules to reconstruct it, the number exists but it is not yet explainable.

An account statement is a history of movements

A customer account changes every time something increases or decreases the balance. A useful statement should let you walk through those movements in order and understand their effect.

One payment can cover several sales

In real operations, a customer can make one payment that is later applied to several sales. The system needs to preserve that distribution without losing the relationship to the original payment. Advances and credit notes also change the balance, but they do not mean the same thing.

Credit is also a commercial rule

During the sale, limit, terms, discounts and approvals matter. After the sale, due dates and recovery matter. That makes credit a process crossing point of sale, administration and receivables.

Management also needs to know how much credit is placed, how much is overdue and how it is aging. A branch can sell very well and collect poorly. Receivables are therefore not only an administrative report; they are a metric of the quality of growth.