Credit Risk Management

Introduction

The Credit Risk feature enables Distributors to manage financial risk by controlling which Commitment Periods and Billing Frequencies their Sellers and Customers can access when purchasing Offers. This feature helps Distributors mitigate payment risks by restricting high-risk billing combinations and implementing approval workflows for orders.

This article explains how to configure Offer Restrictions to limit available billing options and provides guidance on using the Credit Limit functionality for order approval processes.

Why Use Credit Risk Management

The Credit Risk Management feature helps Distributors protect their business from financial risk while maintaining flexibility for trusted partners. This feature provides significant business value in several key areas:

Minimize Financial Exposure

By restricting high-risk billing combinations, you can reduce exposure to payment defaults. For example, preventing organizations from committing to Annual Billing contracts with Monthly Billing payment terms reduces the risk of non-payment over extended periods.

Segment Risk Management

Create different risk profiles for different categories of partners:

• New Partners Profile - Restrict to shorter commitment periods and matching billing frequencies until trust is established
• High-Risk Profile - Limit to prepaid or One-Time billing options for organizations with payment history concerns
• Trusted Partners Profile - Allow full flexibility with all billing combinations for established, reliable partners

Automated Enforcement

Once configured, restrictions are automatically enforced across all purchase channels (both Platform and API), eliminating the need for manual review of each order.

Scalable Risk Policies

Manage risk policies for thousands of organizations efficiently through bulk assignment and Primary Profile settings that automatically assign new organizations to appropriate risk tiers.

Granular Control

Apply restrictions at multiple levels:

• All vendors and Offers
• Specific vendors (for example, Microsoft only)
• Specific Offers within a vendor (for example, only Office 365 within Microsoft)
• Specific billing combinations for each scope

Accessing Credit Risk Management

To access the Credit Risk management area:

1. Navigate to Settings in the main menu
   
2. Select Currency & Payments from the Settings menu
   
3. Select Credit Risk from the left sidebar

3. The Credit Risk Management dashboard displays two main sections:
   • Offer Restrictions - Control organization risk profiles by restricting billing combinations
   • Credit Limit - Control order approval processes with granular settings

The dashboard shows the number of active Risk Profiles/Groups and total Restricted Organizations across all profiles.

 

Understanding Offer Restrictions vs Credit Limit

Offer Restrictions

Offer Restrictions allow you to control which combinations of Commitment Periods and Billing Frequencies are available to specific organizations. This feature helps you:

• Configure commitment term and billing frequency restrictions
• Block high risk combinations
• Apply restrictions by organization

Use Offer Restrictions when you want to prevent specific organizations from purchasing Offers with risky payment terms (for example, preventing Annual Billing commitments with Monthly Billing frequency).

Credit Limit

Credit Limit functionality enables you to control order approval processes by:

• Grouping organizations by risk level
• Requiring approval for specific Offers or Vendors
• Receiving webhook notifications with order details and order value at risk
• Approving or rejecting orders before processing
   

Creating Credit Risk Profiles

Credit Risk Profiles group organizations with similar risk characteristics together for unified management.

To create a new Credit Risk Profile:

1. Click Manage Offer Restrictions on the Credit Risk Management dashboard

2. Click the Create New Profile button

3. Enter a descriptive Profile Name (for example, "High Risk Enterprise" or "New Partners")
   
4. Click Create New to save

Understanding the Credit Risk Profile Grid

The Credit Risk Profile grid displays the following columns:

• Profile Name - Name of the group (clickable to view details, shown in blue)
• Organizations - Number of organizations in the group (clickable to view organization list, shown in red)
• Updated By - Person who made the last changes
• Updated On - Date of last modification
• Primary - Designates one profile as primary (new organizations are automatically assigned to this profile)
• Actions - Edit (pencil icon) or Delete (trash bin icon) options
   

How Credit Risk Profile Works

The expandable "How Credit Risk Profile Works" section explains the workflow:

1. Create Credit Risk Profile - Set up a new risk profile with specific name
2. Add Organizations - Group organizations with similar risk profiles together for unified management and policy enforcement
3. Define Policy Scope - Configure Vendors, Offers, commitment terms and billing frequency restrictions for organization transactions

Configuring Offer Restrictions

Once you've created a Credit Risk Profile, you need to configure which billing combinations to restrict.

To create a restriction configuration:

1. Click on the Profile Name to open the profile details

2. Navigate to the Scope tab

   

3. Click Create Configuration

4. In the pop-up window, configure:

• Vendor - Select "All vendors" or choose a specific vendor
• Offers - Leave empty for all Offers or select specific ones
• Commitment Period (Months) - Select the commitment term to restrict
• Billing Frequency (Months) - Select the billing frequency to restrict

5. Click Confirm to save

Available Configuration Options

Commitment Period (Months):

• None
• No Commitment
• Custom value (enter an integer)

Billing Frequency (Months):

• None
• One-Time
• Custom Value (enter an integer greater than 0)
   

Understanding How Restrictions Work

The Create Configuration pop-up explains the restriction logic:

You can restrict Commitment Period and Billing Frequency together or separately:

• Select both fields to restrict a specific combination (for example, only 12-month commitments with monthly billing)
• Select one field to restrict that option across all combinations

Managing Restriction Configurations

The Scope tab displays all active restrictions with these columns:

• Vendor - Name of the restricted vendor
• Offer- Name of the Offer (shows "All Offers" if not specified)
• Commitment Period - Selected commitment term restriction
• Billing Frequency - Selected billing frequency restriction
• Created On - Date when configuration was created
• Created By - Person who created the configuration
• Actions - Delete option (trash bin icon)

To delete a configuration, click the trash bin icon and confirm the deletion when prompted.

Managing Organizations in Risk Profiles

You need to assign organizations to Credit Risk Profiles for the restrictions to take effect.

To view and manage organizations:

1. From the Credit Risk Profile list, click Organizations button below the grid

2. The Organizations Management table displays all organizations with these columns:

• Status - Color-coded organization status indicator
• Organization - Organization name
• External ID - ERP ID of the organization
• Country - Organization's country
• Tier - Direct (blue) or Indirect (gray)
• Credit Risk Profile - Currently assigned profile (empty if none)
• Actions - Edit (pencil) or Remove (trash bin) profile assignment

To assign organizations to a Credit Risk Profile:

From the Organizations Management view:

1. Click Organizations below the Credit Risk Profile grid
2. Find organizations with an empty Credit Risk Profile field
   
3. Click the pencil icon in the Actions column

4. Select the desired Credit Risk Profile from the dropdown
   
5. Click Confirm

From within a specific Credit Risk Profile:

1. Open the Credit Risk Profile
   
2. Navigate to the Organizations tab

3. Click Add Organization

4. In the pop-up window:

• Search by Organization name, External ID, or Organization Reference number
• Select individual organizations or click "Select first 1,000 organizations"
• Multi-select is available

5. Review the number of selected organizations at the bottom
6. Click Confirm to add them to the profile
   

When an organization currently assigned to Credit Risk Profile 1 is reassigned to Credit Risk Profile 2, the system will automatically close the correlation period with the original Credit Risk Profile 1.

To remove organizations from a Credit Risk Profile:

1. Navigate to the Organizations tab within the profile
2. Click the trash bin icon next to the organization
3. Confirm the removal when prompted: "Are you sure to remove the organization from the credit risk policy scope?"
   

Alternatively, use the Remove Organization button to remove multiple organizations at once.

Understanding the Organizations Tab

The Organizations tab shows:

• Status - Color-coded indicator matching the main Organizations grid
• Organization - Organization name
• External ID - ERP ID
• Country - Organization country
• Tier - Direct (blue) or Indirect (gray)
• Added On - When the organization was added to this profile
• Added By - Person who added the organization
• Credit Risk Profile - Profile name
• Actions - Remove from profile option

How Restrictions Appear in the Platform

Once you configure Credit Risk Profiles and Offer Restrictions, they automatically affect what Sellers and Customers see when purchasing Offers and managing Subscriptions. This section explains how restrictions appear in different parts of the platform interface.

Where Restrictions Apply

The Credit Risk restrictions configured in Settings are enforced in these specific areas:

• Offer purchase pages - When creating new subscriptions
• Subscription editing - When modifying existing subscriptions
   

Offer Page Restrictions for Organizations

When users from Organizations assigned to a Credit Risk Profile navigate to a offer purchase page:

• All combinations of Commitment Period and Billing Frequency are visible in the dropdown menus
• Users can see and attempt to select any billing combination
• Restrictions are validated upon selection, not by hiding options

Organizations not assigned to any Credit Risk Profile see all available billing options without restrictions.

How Validation Works:

When a user selects a restricted combination, the system immediately displays an error message below the affected field:

The error message states:  "This option is not available for direct purchase. Please contact your sales representative for assistance."

The field is highlighted with a red border, and users must select a different, permitted combination to proceed with the purchase.

Organizations not assigned to any Credit Risk Profile can select any billing combination without validation errors.

Subscription Edit Restrictions

The same logic applies, when users attempt to edit an existing subscription that has a restricted billing combination:

The restricted field will be highlighted in red with the message:

 "This option is not available for direct purchase. Please contact your sales representative for assistance."

This prevents users from modifying the subscription to use a restricted billing combination. Users must either:

• Keep the current billing configuration
• Select a different, permitted combination if available

Example Scenarios

Validation and Error Messages

If a user attempts to select a restricted combination (for example, through API or by changing values that create a blocked combination):

The affected field turns red and displays: "This option is not available for direct purchase. Please contact your sales representative for assistance."

IMPORTANT: Existing Subscriptions

Subscriptions purchased before a restriction was added are excluded from restriction rules for their current billing combination:

• If a Customer purchased a subscription with "12 month commitment + 1 month billing" before restrictions were added
• Later, you add a restriction blocking "12 month commitment + 1 month billing"
• The Customer can still manage their existing subscription normally:
  • Change quantity (add/remove licenses)
  • Suspend or reactivate
  • Update other subscription settings
  • Renew with the same billing combination

What is restricted:

• The Customer cannot change the subscription to a different restricted billing combination
• New purchases of that Offer with the restricted combination are blocked
• The current billing combination remains available only for that specific subscription

This approach ensures that existing subscriptions continue to function normally while enforcing restrictions on new purchases and changes.

How Restrictions Are Controlled

Credit Risk restrictions operate differently depending on how the Offer is accessed:

For Platform Offer Pages:

• Restrictions are controlled by the Product Management Presenter Form
• The presenter validates selections based on restriction rules set in the Distributor Platform's Settings → Credit Risk
• Validation occurs in real-time when users select billing options
• Error messages appear immediately below the affected field

For API Orders:

• Restrictions are controlled by the system
• The backend validates order requests based on restriction rules before processing
• API calls with restricted combinations will fail with an error response
• Organizations must use permitted billing combinations in their API requests
   

Understanding Rule Specificity

When multiple restriction rules could apply to the same organization, the most specific rule takes effect:

Rule Hierarchy (from most specific to least specific):

1. Vendor + Specific Offer+ Billing combination
2. Vendor + All Offers+ Billing combination
3. All Vendors + Billing combination

Multi-Tier Restriction Inheritance

Restrictions set by Distributors are automatically inherited by Sellers and their Customers, creating a cascading restriction model:

Restriction Flow:

1. Distributor creates restrictions for a Seller
2. These restrictions automatically apply to the Seller and all their Customers
3. Seller can add additional restrictions for their own Customers
4. Both Distributor and Seller rules are presented in the restriction rules list

How Combined Rules Work:

When both Distributor and Seller have restrictions for the same organization:

• All applicable rules are evaluated together
• Both sets of restrictions are enforced
• The organization sees the combined effect of all restrictions from their chain
   

Credit Risk in Product Management

The Product Management (also known as Configure Price Quote or CPQ) presenter automatically receives and enforces Credit Risk restrictions when rendering Offer forms.

How Product Management Processes Restrictions

When a restricted organization accesses a Offer page, the following process occurs:

1. User Action - Seller or Customer navigates to catalog or subscription edit
2. Platform UI Call - The interface requests available billing options from the backend
3. Restriction Check - The backend identifies the organization's Credit Risk Profile and retrieves applicable restrictions
4. Data to Product Management- Platform passes the filtered list of permitted combinations to the Product Management presenter
5. Product Management Filtering - The presenter applies the restrictions to the Offer form
6. Display - Only permitted options appear in the Commitment Period and Billing Frequency dropdowns

Technical Implementation in Product Management

The Product Management presenter receives restriction data in this format:

• List of blocked commitment term and billing frequency combinations
• Organization identifier to determine which restrictions apply
• Vendor and Offer scope for each restriction

The presenter then:

1. Filters out blocked values from available options
2. Validates user selections against allowed combinations
3. Displays error messages for invalid selections
4. Prevents form submission with restricted values
    

Managing Credit Risk in Distributor Portal

Credit Risk Profiles can be assigned and managed through the Seller Management page in Distributor Portal. This provides an alternative interface for managing Seller risk profiles alongside other Seller settings.

Accessing Seller Management

To access the Seller Management page:

1. Navigate to Distributor Portal
2. See the list of the Sellers
   

Seller Management Grid with Credit Risk

The Seller Management grid displays a Credit Risk column where you can view and assign Credit Risk Profiles:

Assigning Credit Risk Profiles to Sellers

To assign a Credit Risk Profile in Seller Management:

1. Locate the Seller in the grid
2. Find the Credit Risk column
   
3. Click the dropdown in the Credit Risk field
   
4. If there are no Credit Risk Profiles created yet,  click "+" icon next to New
   
5. You will be redirected directly to the Credit Risk Settings on the Platform to create new one and assign the Organization.
   
6. If there are Credit Risk Profiles created, you can choose one of them from the list.
   
7. The assignment is saved automatically
    

NOTE! Hover over the Credit Risk column header to see the tooltip:
 

Seller Management Credit Risk Rules

Credit Risk Profile assignment in Seller Management follows these rules:

Timing Restrictions:

• Credit Risk Profile is disabled for 30 minutes after Seller creation
• This prevents accidental restrictions during onboarding

Approval Status:

• Credit Risk Profile is editable for unapproved Sellers
• Credit Risk Profile is editable for approved Sellers
• Sellers can be approved with or without an assigned Credit Risk Profile

Permission Requirements:

• Distributor Admin - Full edit access
• Distributor ReadOnly - View only, cannot assign profiles
• Seller Admin - Can view their own assigned profile but cannot change it

Two-Way Synchronization

Changes made in Seller Management automatically sync with the Credit Risk settings area, and vice versa:

Both interfaces modify the same underlying data, so you can use whichever workflow fits your process best.

Deleting Credit Risk Profiles

To delete a Credit Risk Profile:

1. Navigate to the Credit Risk Profile grid
2. Click the trash bin icon in the Actions column

3. Review the deletion prompt

If organizations are still assigned:

• Message: "All organizations must be unassigned from Credit Risk Profile"
• Only option: Close
• Action required: Remove all organizations first, then retry deletion

If no organizations are assigned:

• Message: "Are you sure you want to delete this Credit Risk Profile?"
• Options: Cancel or Confirm
• Click Confirm to permanently delete the profile

Alternatively, from within a Credit Risk Profile, click the Delete Risk Profile button above the Scope grid.

Summary

The Credit Risk Management feature provides Distributors with powerful tools to manage financial risk by controlling billing options available to Sellers and Customers. By creating Credit Risk Profiles and configuring Offer Restrictions, you can prevent high-risk billing combinations while maintaining flexibility for trusted partners.

When an organization currently assigned to Credit Risk Profile 1 is reassigned to Credit Risk Profile 2, the system will automatically close the correlation period with the original Credit Risk Profile 1.

Key takeaways:

• Create Credit Risk Profiles to group organizations with similar risk characteristics
• Configure Scope restrictions by Vendor, Offer, Commitment Period, and Billing Frequency
• Assign organizations to profiles to automatically enforce restrictions
• Restrictions filter available options on Offer pages for affected users
• Manage profiles through both Credit Risk settings and Product Management
• Set one profile as primary to automatically assign new organizations