All 22 Credit Control questions
More in Credit Control
What is the difference between credit control and collections? What are common credit terms and what do they mean? What is the purpose of a credit check before accepting a new customer? How do you assess a customer's creditworthiness? How do credit terms influence sales and cash flow? What is the order-to-cash cycle and where does credit control fit? How is credit exposure monitored on an ongoing basis? How should credit limits be reviewed and adjusted over time? How does a credit policy document support consistent decisions? What external data sources inform credit decisions?
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Accounts Payable & Receivable › Credit Control

What is a credit hold and when is it applied?

Intermediate

Answer

A credit hold blocks new orders or shipments to a customer, typically triggered when they exceed their credit limit, have significantly overdue invoices, or show heightened risk. It protects the company from increasing exposure to a risky account. Holds are released when the customer pays down the balance or the issue is resolved.
Real-world example A customer 60 days overdue is placed on credit hold, so no new orders ship until they clear the arrears.

Common follow-ups: What triggers a credit hold? | How is a hold released?

Collections & Bad Debts Aging Analysis Credit Control
All 22 Credit Control questions