Credit limits are part of customer agreements and are used to control the total amount of outstanding authorized for a customer. It would not affect sales orders, pending sales invoices, or pending shipments. When a sales invoice is to be marked as ready and posted to the ledger, or when a shipment is packed and shipped, however, the system would check the resulting outstanding balance for the customer against the credit limit. If the operation would cause the new outstanding balance to exceed the pre-set credit limit, then the operation would be disallowed by the system.
To ship to the customer or approve and post his invoice again, one of the following could be done:
- Increase the credit limit of the customer
- Receive a payment from the customer
- Use a credit card as a payment method on orders instead. If there are authorized payment methods on the order, then they would be counted as potential payments.
Another way that more credit could become available to the customer is if one of the existing invoices were written off. If you do not want this to happen, you would have to reduce the credit limit of the customer after writing off the invoice.
Note that credit limits are based on the total outstanding receivables for a customer and not related to billing accounts and their account limit settings.