Trade Shield | Knowledge Centre LIMIT REVIEW

What Does Trade Shield Need to Give a Limit Recommendation?

3 min read 3 requirements explained

Before Trade Shield can generate a Limit Recommendation for a customer, three pieces of information must be in place. Each one serves a specific purpose in the credit assessment — without them, Trade Shield simply does not have enough context to make a meaningful recommendation.

In this article

1. Credit Terms	2. Credit Limit
3. Trading History	What happens if something is missing?

Credit Terms — the payment time period

Trade Shield needs to know the terms under which the trade will occur — typically expressed as a number of days (e.g. 30 days, 60 days, net 30 EOM).

Why does this matter? Without a time period, there is no baseline to measure payment behaviour against. If a customer has no agreed terms on file, Trade Shield cannot determine whether they are paying on time, early, or late — because there is no "on time" to compare against. The terms are the benchmark that makes the behavioural data meaningful.

WHY TERMS MATTER

⚠ No Terms on File

Customer pays in 45 days.
Is that good or bad?
Impossible to say — there is no agreed period to compare against.

✓ Terms = 60 Days

Customer pays in 45 days.
That is 15 days early — excellent payment behaviour.
Now Trade Shield can assess risk accurately.

ⓘ Tip: If terms are missing or incorrect, update them in your ageing/ERP system first — this feeds through to Trade Shield and unlocks the Limit Review.

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Credit Limit — the overtrading benchmark

A credit limit is the maximum amount of credit extended to the customer. This must be on file before Trade Shield can assess their eligibility for a recommendation.

Why does this matter? Without a limit, Trade Shield has no way to detect overtrading. If a customer is consistently buying more than their approved limit, that is a significant credit risk signal — but you can only see it if a limit exists in the first place. The limit is the line in the sand that makes the exposure visible.

OVERTRADING — ONLY VISIBLE WITH A LIMIT

Customer: ABC Trading

▲ Overtrading Risk

Credit Limit: R 50,000

Current Exposure: R 73,000

Exposure exceeds limit by R23,000 — overtrading detected because a limit exists to compare against.

ⓘ Tip: If no limit is recorded, send a new application to the customer or update the credit limit in your ageing system so it reflects correctly in Trade Shield.

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Trading History — at least 6 months

Trade Shield looks for a trading history of at least 6 months — this is the minimum period needed to identify payment behaviour patterns rather than one-off transactions.

Why does this matter? Patterns take time to emerge. A customer who paid on time twice tells you very little — but a customer with 6+ months of consistent, on-time payments tells you a great deal about how they will likely behave going forward. The goal is to assess established behaviour, not isolated data points.

ⓘ Important: Trading history can come from a different ageing book

The 6-month history does not have to be with your organisation specifically. If the customer has an established trading record with another supplier — even from a different ageing system — that history is valid. The purpose is to establish how the customer behaves as a payer, regardless of who they were trading with.

⚠ Note: Trading history is preferred but not always required. If no history exists, Trade Shield can still generate a recommendation — but it will be based on statutory/bureau information only, not behavioural data. This means the recommendation carries less predictive weight than one supported by actual trading history.

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What happens if something is missing?

If Terms or Credit Limit are missing, Trade Shield cannot provide a Limit Recommendation. These two are non-negotiable. There are two practical ways to resolve this:

? Option A: Send a New Application

If the customer needs to be re-onboarded or key information is missing, sending a new application gathers the required details — including terms and credit limit — and ensures everything is clearly established from the start.

✎ Option B: Update Your Ageing System

If the customer already has an account number in your ERP or ageing system, update the credit terms and credit limit there. This keeps the account number consistent for continuity and the corrected information feeds through to Trade Shield.

Once terms and limit are correct, you can proceed with initiating the Limit Review — Trade Shield will evaluate the customer's eligibility based on the updated, accurate information.

Quick Reference: Limit Recommendation Requirements

Requirement	Why it is needed	Mandatory?
Credit Terms	Baseline to assess whether payment is on time	Yes — required
Credit Limit	Detect overtrading; measure exposure against a limit	Yes — required
Trading History (6+ months)	Establish behavioural payment patterns over time	Preferred — statutory fallback available

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+27 (0) 10 753 1630