The concept of Maximize Credits in PPR is used when a payment is having more Negative Value then Positive Value, which means more credit memos then standard invoice.
Understand this with below examples.
Example 1: Maximize Credit Disabled
Standard Invoice 1: 300
Standard Invoice 2: 200
Credit Memo 1: -350
In this case total payment is positive which is Rs 150, so system will pick the Invoice and Credit Memo and will pay the amount.
Example2. Maximize Credit Disabled
Standard Invoice 1: 300
Standard Invoice 2: 200
Credit Memo 1: -350
Credit Memo 2: -250
Credit Memo 3: -100
In this case PPR will not select any Invoice and Credit Memo due to Credit is Low, which means that total amount to be paid is Rs -200 which is not allowed as per oracle standards.
Example3. Maximize Credit Enabled
Standard Invoice 1: 300
Standard Invoice 2: 200
Credit Memo 1: -350
Credit Memo 2: -250
Credit Memo 3: -100
In this case PPR will select the data in the below logic.
Standard Invoice 1: 300
Standard Invoice 2: 200
Credit Memo 1: -150
Credit Memo 2: -250
Credit Memo 3: -100
Here PPR automatically deducts the amount of Credit Memo and make it equal to the total of Standard Invoice and then will Pay Zero Payment. Which is the actual concept of Maximize Credit.
To know more about the concept refer the below Oracle Doc. ID.
How does a Payment Process Request (PPR) handle Credit Memos in R12? (Doc ID 1279569.1)