Import your data from Excel To Tally in Easiest & Fastest way.

Request Demo
How to Set a Party Ledger Credit Limit

How to Set a Party Ledger Credit Limit

Monitoring a customer’s and a supplier’s credit limitations is a wise business strategy. This facilitates better management of a company’s payables and receivables.

The standard method for determining credit limits is to consider the reliability, volume of transactions, payback capacity, etc. of the client and supplier.

Tally ERP 9 offers the Credit Limit option to determine the maximum amount of credit that can be granted to a customer or a supplier in order to ensure better credit management.

With the help of this function, business owners may guarantee that no invoice will be created that exceeds the specified credit limit unless the user has the authority to change it.

In Tally ERP 9, setting a Credit Limit for the party ledgers is quite easy and straightforward.

On the party ledger creation or alteration screen, all you have to do is enable the option and enter the limit.

Activating Credit Limit:

  • Visit the Tally Gateway and select F11: Accounting Features.
  • Set “Maintain Budgets and Controls” to “Yes” under “Budgets and Scenario Management”

Credit Limit for One Ledger:

  • Log in to the Tally Gateway and select Accounts Info > Ledgers. Choose “Alter” next to “Single Ledger”
  • From the “List of Ledgers,” choose the necessary party ledger.

Credit Limit for a number of party ledgers:

  • Visit the Tally Gateway and select Accounts Info., Ledgers, and Credit Limits.
  • Choose the necessary “Group” from the “List of Groups,” such as “Sundry Debtors” or “Sundry Creditors.”
  • Set the “Credit Limit” for the ledgers as necessary on the “Multi Ledger Limit Alteration” screen.

Accept the display

Let’s try to pass a sales invoice using a ledger called “Modern Timbers” (Sundry Debtors) for an amount greater than “1,000,00,” which is the designated credit limit for this ledger, in order to show how the credit limit affects the transaction. The prompt message “Credit Limit of the selected party exceeded” will be displayed whenever the invoice is raised over this limit, as illustrated in Tally.ERP 9:

The Order and Invoice entry vouchers (Sales and Purchase) show the available limitations by showing the current balance and the credit limit of the Ledger accounts. If you need to make a transaction that exceeds your credit limit, you can change it if you have the proper authorization. Thus, you can effortlessly create credit limits for your party ledgers and take charge of your company’s receivables and payables with Tally.ERP 9. This lowers risks and enhances collection for your company.

Get FREE Demo of Excel to Tally Software