# Customer credit limits, pay terms and advance balance

> Set a credit limit and pay term per customer, understand balance due vs advance balance, take deposits and spend them as store credit.

Source: https://docs.smartposhub.com/selling/customer-credit-limits-and-advances/  
Last updated: 2026-10-30  
Product: SmartPOS Hub (https://smartposhub.com)

Credit limits stop customers from owing more than you allow, pay terms tell SmartPOS Hub when an unpaid sale is late, and the advance balance holds money customers leave with you. This page explains all three and how they show on the customer page, the POS and the app.

## Set the credit limit and pay term

1. Open **Customers › Customers**, then **Add** for a new customer or **Edit** on an existing one.
2. In **Balance & credit** fill in:
   - **Credit Limit** — the most the customer may owe at once. *Keep blank for no limit.*
   - **Pay term** — a number with **Days** or **Months**.
   - **Opening Balance** — what they already owed before you started with SmartPOS Hub.
3. Press **Save**.

![Customer form Balance and credit section with Opening Balance 0, Pay term 30 Days and Credit Limit 2000](https://docs.smartposhub.com/_astro/customer-balance-and-credit-fields.DN17Zblg.png) (web app page: `/contacts?type=customer`)

Default for new customers: **Settings › Business Settings › Contact › Default credit limit**.

## How the limit is checked

When a cashier finishes a sale that is not fully paid, SmartPOS Hub adds the unpaid part to what the customer already owes on final sales. If the result is above the limit, the sale is **not saved** and the POS explains the numbers:

![Credit limit reached message with limit 2,000, already due 879 and this sale 1,790.95](https://docs.smartposhub.com/_astro/credit-limit-exceeded-warning.CgodUQDp.png) (web app page: `/pos/create`)

To continue: take more payment now, collect older dues first, or raise the limit. Fully paid sales are never blocked.

## Read the balance cards

![Customer page cards: Total sales, Balance due 379.00 outstanding, Advance Balance 0.00, Credit Limit bar 19% used](https://docs.smartposhub.com/_astro/customer-balance-due-and-credit-limit.kML820H1.png) (web app page: `/contacts/…`)

| Card | Meaning |
|---|---|
| **Total sales** | Everything sold to the customer, with **Received** below |
| **Balance due** | Everything still unpaid: sales, bookings and memberships, opening balance, minus returns, ledger discounts and payments. Positive = they owe you; negative = you owe them |
| **Advance Balance** | Money paid in advance, usable on future invoices |
| **Credit Limit** | The limit and how much of it is used by unpaid sales (*19% used (379.00 unpaid)*) |

## Advance balance (deposits and store credit)

1. **Take an advance:** customer page › **Add payment** › enter the amount › **Save**. Anything above the balance due goes to **Advance Balance**.
2. **Spend it:** in the POS payment window or **Add payment**, choose **Store credit (advance)**. The POS shows the customer's **Advance Balance** at the top of the payment window.
3. **Not enough?** You see *Required advance balance not available* — pay the rest with another method (**Add Payment Row**).

Returns settled as **Store credit** also add to the advance balance — see [Gift cards and store credit](https://docs.smartposhub.com/selling/gift-cards-and-store-credit/).

## In the SmartPOS Business app

The customer screen says it in plain words: **Customer owes you**, **You owe this customer** (*they paid more than they bought, or a return was not refunded*), or **All settled** — with *What makes up this balance*, the advance and opening balance, and the credit limit bar. Selling above the limit shows **Over the credit limit**.

![App customer: Customer owes you 2,598.61 with sales and opening balance not paid, credit limit 6% used](https://docs.smartposhub.com/_astro/customer-owes-you.CX1tpgRe.png)
![App customer: You owe this customer 163.30 because a return was not refunded](https://docs.smartposhub.com/_astro/you-owe-this-customer.CnrLFiz2.png)

## Tips

- Review **Reports › Supplier & Customer Report** and **Payment by Age** weekly for customers close to their limit.
- Give long-standing customers a pay term; give new ones a small limit.
- Don't put deposits as negative sales — use **Add payment** so they show as advance.

- [Credit sales and part payments](https://docs.smartposhub.com/selling/credit-and-partial-payments/)
- [Customer ledger](https://docs.smartposhub.com/customers/customer-ledger/)

## Frequently asked questions

### What does the credit limit count?

The unpaid amount of the customer's final sales plus the new sale. Drafts, quotations and sales orders are not counted. When the total would go above the limit, the sale is refused.

### How do I give a customer no limit?

Leave Credit Limit empty on the customer. The customer page then shows No limit.

### Can I set the same limit for all new customers?

Yes. Set Default credit limit in Settings › Business Settings › Contact. New customers get it, and you can still change it per customer.

### How do I take a deposit from a customer?

Open the customer and press Add payment. Enter the deposit amount; whatever is more than the balance due is kept as advance balance.

### How does the customer spend the advance?

At the next sale, choose Store credit (advance) as the payment method in the payment window or in Add payment.

### What does a negative balance due mean?

You owe the customer, for example after a return that was not refunded. Refund it with Add payment or let them use it on the next purchase.