[Music] hello and welcome everybody in this video I'm planning to show you new functionality that was added to credit and collections module in Dynamics 365 for finance specifically that functionality allows you to automatically calculate credit limits for the customers based on the rules that you define in the system this functionality became available in 2020 release wave 1 of the application the first thing you will need to do in order to test that functionality is to enable that feature for that purpose you will have to navigate to feature management workspace once you're inside I will go to all and will search for the word credit you will see that the credit management allows you to create and manage credit limits block customer orders based on the rules and release those orders this functionality or this feature has been added to our demo system a couple of days ago and it was enabled on March 24th as well so we're good to go here in order for you to test we will navigate to modules select credit and collections and on top of all the familiar setups and menu items that already existed here we start seeing items that are specific to the new functionality right here we see the risks right here we see credit management setup and we also see credit and collections parameters and this is where we'll go next once you're in here I will navigate to credit tab here I will go to the credit limits and I will make sure that the allow manual editing of credit limits is turned off what that means is that user will not be able to edit credit limits directly on the customers form instead they would have to go through the credit limit adjustments form which we will discuss later in this video there are other setups related to how orders are going on hold there right here and I'm planning to cover those in a separate video that hopefully will be released right after this one now let's talk about defining the rules that will govern how these credit limits are automatically calculated for our customers the first thing we'll need to define is the ranking so once you're in the credit and collection module go under set up credit management select risk and go to risk classification under here you see that I have defined three classifications or three ranks I have a low rank which basically gets you from zero points to three five points then I have a medium rank it goes from 36 to 60 and then I have a half high rank from 61 to hundred so I have those three buckets and each of my customers will fall in one of those buckets based on the number of points or ranking points that they will get accumulated so this is just the buckets there are no rules in accumulating those points yet the next thing we'll need to define will be the scoring groups under here I have defined two scoring groups the first one is called account and that feeds from the account status which is another a brand new field on the customer master that you can assign a single status to a customer and based on the status assigned to a customer I can add certain number of points to that customer when it comes to credit limit ranking and as you can see here that I have a status that is blocked which is again I'll user-defined statuses and the scores or the number of points that will get you is zero then for my small accounts I have ten points defined from for my medium ones thirty and for my large customer counts are fifty points so again based on the account status that was selected for each customer each of those customers will get a certain number of points either 0 10 30 or 50 in those cases and another scoring group is growth you can see here that it doesn't really type to any group type and that was purely user-defined what that means is it doesn't look at the fields on the customer master to determine the status or the another group it actually looks into a ranking area which I will show you next and then decides how many points should be accounted for for each customer based on the growth index so I have defined a growth index which is user defined ranking and from there on I'm saying if the growth index is from 0 to 30 which means companies that are not growing so rapidly I will get them 10 points when it counts towards their credit limit for the companies that are same in growing which are between 35 and 70 growing index points they will get 30 points in in the ranking and then for the high pays growing companies that are from 71 to hundred index points they will get 50 ranking points for their credit limit calculations so once we have defined those two scoring groups the next question that you may ask would be how do you assign values for each customer based on those two scoring groups for that purpose we will navigate and we will open our customer table and in here I will randomly select a customer here and navigate to a new tab on the top called credit management and in here I will click on risk score what I will see here is that I see my two scoring groups account again that account status that goes from small medium to large and blocked and then I see my growth index but in the second column you see there are no values here what that means is that specific customer doesn't have any values for those two scoring groups and therefore the total number of ranking points would be zero in this case so what do you need to do in order for it to calculate these ranking points so the first thing is of course you need to have to make sure that my account status is defined for this customer so I'm gonna open the customer details form for this specific customer will switch to edit mode scroll down to my credit and collections area in here and you see there are many more new fields that have been added but what I'm most interested is the account status and if I click on that drop-down right here here you see the four account statuses that I have defined if you're interested we can go into the main table for those just to see those are user defined those were defined by me and I have actually assigned an ik blocked account status as a block which means it's blocked for all invoicing and deliveries so you can just simply change the account status and that will in turn apply a hold to a customer account other ones large medium and small you see that they blocking was switched to no that means doesn't matter which one of those three you select there will be no blocking on this customer account so let's go back to our customer cart here and what I will do here is I will select for example an account status as large if I go back to my risk score here though you see that the value is still blank I can manually select it but that's not really ideal right what I want to have is just define a field on my customer master which is this is a customer account status large and then expect the system to pick up and reflect this change in my ranking scoring so in order for me to see this rankings going to be updated I have to run a separate periodic job so I'm in my credit and collections module again I will navigate to periodic tasks go to credit management and here is yes a new job that is called update risk scores so what that job does again you can set it up as a periodic job is looking at how the inputs based on your scoring groups and then calculates a score rank for each of the customers so I'm gonna run this job this job job runs pretty quickly and once I do that let's go back to that customer number 24 and that is check if the ranking has been updated so I'm gonna select that here was square that's a customer that we looked at before and now I'm gonna click on risk score and now we see that the value here has been updated so now it's truly reflected that my account status is large and then I see the risk contribution gives me 50 points what that means is a large customer based on our scoring groups if you remember the large accounts get 50 points towards their credit limit calculations the growth though cannot be really controlled by any field on the customer record why because this is a user-defined scoring group so in order for me to be able to enter a value I have to do it directly right here and if you remember we have that growth index going from 0 to 100 and let's say in this case it would be 35 so as soon as you type in the value 35 if you dug out from that field you see that the number of points has been changed to 30 if you for example increase it to 80 I think you will see that the risk number of points has jumped to 50 and I think somewhere in between I think it's 45 for soon we have a number of points that is set to 3 right so the user define ranking has to be entered manually in this risk ranking form for other ones you just have to update the field or the date in the on the customer master and that would in turn reflect on the ranking system after you ran that periodic job one thing I wanted to mention if we go back to our scoring groups and click on you I just wanted to show you the different inputs that the system can track when it comes to calculating that rank you can see that it looks at the account status which we already used you can also look at the default country address you can also look at the new field that is called credit management group which is basically a user-defined number a list of groups that you can assign to individual customer but it also looks at the customer since so there's a new field and a custom roster that allows you to specify the date from which that customer became a customer and you can use this in calculating their ranking it also keep you can use average payment days DSO average balance etc etc so there are different inputs that the system can account for when it comes to calculating that rank all right so now let's let me go back to my customers here and show you what I have done for three customers that I will use for this demonstration so the first one is the customer number 21 which is utter wholesale and if we look at this account number right here we see that the account status is medium and then if we go to our risk score we see that the growth index was set to 80 and total we have 30 points that are coming from the account status and 50 points that are coming from the growth index right so what the system does it looks at both scoring groups at album scoring groups that you have defined and sums them up so in this case we have 30 plus 50 so we have 80 ranking points that were accumulated for the customer u.s. is 0 to 1 then we're going to look at another customer here which is number 22 we will see that account status is small and if we go to the risk score we see that it's 55 so we have 10 points calculated for the small account and then three points calculated for the growth index value of 55 so in total we have 40 points calculate for the second account and then for the last customer that we will use for this demonstration number 23 what I have done is I have specified the account status you will see it's medium but I intentionally left the growth index blank I did not enter it manually so in this case you see that the medium gives me 30 points but because the growth index was left as blank the value or number of points calculated for the growth was actually zero so this is the lower lowest ranking customer just because he has only three points coming from the account status and zero from growth all right so we have first customer 80 points in total the second customer 45 points in total and third customer 30 points in total and just to refresh your memory if we go back to the first setup that we looked at was this risk groups risk classifications we see that for customers that are from zero to three which would be our last customer that will fall into the low ranking group for the customers that are between 36 and 60 which would be that second customer they will fall into that medium ranking group and for the first customer you have 0 to 1 the one that has 82 points in total it would fall into our high ranking group now let's put it all together and see how we can actually define the credit limits based on the rank group that each customer falls in and that will be the last piece of the configuration that we have to review before we move on to the calculations so we will go under risk automatic credit limits menu item so in here I have defined three groups every time you click on you you'll see the risk group is a mandatory field so if I have to define credit limits for the customers that fall into three different risk groups I have to create three different records right on here so let's review the low one in low one I'm saying that if the customer falls into the low group which will be at that third customer zero two to three we have these three records that will define what credit limit he will get and you can see here that it's not really driven by the total number of points it's actually looking at the specific scoring group in this case I'm saying it's an account and then defines the credit limits based on the value of the account status so if they value if the account status is large and the customer falls into the low-risk group then this customer is going to get a credit limit 30,000 calculated if the customer account is medium and this customer falls into the low-risk group then he will get calculated 20,000 credit limit and then for the account number that is small and it falls in that low risk a low-ranking group then they're only going to get 10,000 suggested by the system right so that will be the case for our third cast because that third customer was actually gonna fall into the low-risk group based on the number of total number of points but because they account status for that customer would be medium that's the value that we expect the system to suggest to us the second customer if you remember was actually using the second customer had a growth index of 55 which translated to 50 points and the account value was small which translated to ten points so in total we had three plus ten it resulted in 40 and that that's why the second customer will will fall into that medium ranking group but what will define his credit limit is not the total number of points but rather a specific value in this case of the growth index so what I'm saying in here is that if the growth index for that customer is greater or equal to 90 and this customer belongs to that medium group then these guys will get seventy five thousand suggested to them if the growth index is greater than or equal to 30 points then they will get 45,000 suggested and then the lowest one from ten or greater that would be only 25 and if you remember I said that the second customer his growth index was actually 55 right so what that means they're not quite here yet that means they're only 55 so then do not really qualify for the 75,000 credit limit but their growth index is 55 so that means they qualify 44 for 45,000 suggested credit limit and the second or the last group that I have defined here when it comes to calculating our automatic credit limits is the high one right the last one but what I wanted to make here is I wanted to to complicate things on purpose just because there are two parts to these calculations the first one the system looks at the total number of points each customer has and then decides on the risk group right so in our in our case that first customer has 80 points in total therefore that customer qualifies to that high-ranking group but then in order to decide the credit limit there is a second part that looks at the specific value of the specific scoring group but you can see here I have combined to scoring groups I have combined growth index and I have combined that count status and I mix them all together in here and I will show you the results of the sequencing of this records in this form right now now let's go into demonstration I will now go into my credit limit and adjustments so that's a form that I can use to modify the current credit limit remember I have disabled manual editing of the credit limit on the customer form so I cannot do it on the form itself anymore I have to go through this posting journal one thing that I will say if you have any issues creating a new journal if you're getting an error you have to define a number sequence for the credit for the journal numbering that thing so because I already fixed that issue right here I'm going to create a new journal header I will stick to the credit limit I will not use the temporary credit limit with which I will discuss in my next video and then I will click on lines and then I have my blank journal I will click on generate and I will navigate to automatic credit limits in this case the form saying alright so for which customers would you like to calculate new suggested credit limit if you click on the records to include you see that I basically kept the filter wide open the only thing that I'm saying is the customer has to have unlimited credit limit set to no that means that it's a limited credit limit that the customer should have and I also had to define the expiration date of my new credit limit and let's say I'm going to move it to end of May 2020 and then I'm gonna run my job so we will see a number of records calculate it and then we're going to review the new credit limit column right here so if we scroll into our customers right here so I think here are the two three customers that will discuss 23 22 and 21 so let's take a look at the first at this right here so we have a credit limit calculated as 20,000 so let's just kind of go deeper into why the system suggested as 20,000 all right so remember this customer fell into our low-ranking risk group based on the total number of points that packed that customer only got 30 points and that's why he's in low group so we have to look at the low group right here and then we have to look at the account size this customer was actually marked as the medium account based on its status and that's why we have 20,000 suggested right here if we look at it right here we see the new credit limit suggested by the system is 20,000 right so we kind of figured out the logic right here let's take a look at the second customer that second customer was qualified as a medium based on its ranking based on a total number of points right so we have to look at the medium right here but remember this customer had a growth index of 55 so it's not so many 5,000 because it only starts from nati points and up but it's actually this record right here three points and up and that's why we have the correct new credit limit suggest that that's 45 thousand let's go back here and let's check a look yes it is 45 thousand now let's take a look at that last customer and we see that the system have suggested as 50 thousand as the credit limit so let's go and remember that customer was a high-ranking group so we have to open it right here so we're basically saying that all right so the growth for that customer was set to 80 right so this does not qualify we're going to start from the top and gonna go down this record the first record doesn't qualify why because it's only for the customers that have a growth index 90 or above in this case in this case customer is not there he's only at 80 so we look at the second record and the growth index is actually saying 30 or above and that's the case for that specific customer and that's why the system suggested as 50,000 as the brand new credit limit but what I wanted to illustrate here is how important the sequencing of this records in this form because all it's looking at is from the bottom and as soon as it finds the match either based on the growth or based on the account it doesn't matter which scoring group there is as soon as it finds the match on any scoring group that's or that's the limit that it will suggest so what I will do here I will go into the edit and I will what I will illustrate is I will move the this account I will move it up I'm putting it in between the growth 90 and above and the growth 30 and above I'm putting it right in between when I change that again I make I'm expecting the system go from the top bottom I'm expecting it to go and start qualifying each of those records from top to bottom so let's take a look how it works so I will save this changes I will generate and you automatically limit suggestions I will make sure that delete existing lines are set to yes so it's gonna regenerate the lines for me and now I'm thinking all right so it's gonna go from the top it's gonna look at the first record is growth index 90 or above and that's what would be no all right so it's gonna skip it and we're gonna move on to the next record and the red next record in our case will be is that count number that is the account status medium and in this case for this customer yes it was it was set as the medium account status so it's gonna say okay here's a match I found a match based in the count and here's a new suggested limit 275 thousand and if we check it right here now the newly suggested credit limit for this customer based on the new sequence that we have just defined would be 275 thousand and then in order for you to activate these new limits all you have to do is just click on a post and that will result in an update of our credit limits for all the customers for which we have included in our journal so that was my demonstration of the new functionality that automatically calculates and suggests new credit limits based on the customer ranking I hope you found it useful and in a second part of the credit and collections review I will be talking about order holes and how we can define the rules that govern these holes until the next time take care [Music]