a small doubt in credit management

[Former Member]

hi,

i have a small query related to credit management,

Eg: For customer XXX there is 1000/- as credit limit. He has used all the total amount which is shown in credit exposure 999%.

How the system behaves or what is the impact on credit exposure that is 999% for this customer when it comes to raising of credit memo request to the same customer let's take credit memo request value is 100/-.

please explain.

regards,

balajia.

[Former Member · Accepted solution]

hi Balji,

Yes this is possible. once you issue a credit memo this revert the credit limit. Please make sure that Credit memo pricing procedure should have "A" in subtotal filed against the net value. You can check this in SIS tale S067 and S066.

Pls issue some points if helpful.

Thanks,

Mauryan.

[Former Member · Accepted solution]

hi mauryan,

can you please elobarate this in detail.

regards,

balajia

[Former Member]

answered

[jignesh_mehta3]

Hello Friend,

See basically the Credit Management Works as:

1. Every Invoice & Debit Memo increses the Debit Amount which is Receivables from Customers. Thus this increases the Credit exposure.

2. Every Credit Memo decreases the Debit Amount (as it is a Credit entry) which decreses the Receivables from Customers. Thus thus this reduces the Credit exposure & the percentages...

Hope this clears...

Thanks,

Jignesh Mehta

[Former Member]

Hi,

If you make a credit note of Rs.100, it will bring down the credit exposure and hence the credit limit used (in %) will also reduce.

Regards

Sanjay