on 01-21-2011 6:00 PM
Dear All,
In credit management, we have two control OVA8 and FD32.
We are maintaining some "Maximum document value in OVA8.
Also maintaining Credit limit FD32.
Which value will be considered for Credit check?
Kindly explain.
Regards,
Mullairaja
If you read the help for this field in OVA8, that explains the details.
For example, for new customers, when there is no set-up made in FD32 (by accounting), then entering credit value in OVA8 can help to check the credit limit.
Once credit limits are maintained in FD32, then the users need not maintain in OVA8 -Maximum document value
Regards,
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Dear All,
Thank you very much for the clarification. Let me narrate my understanding.
If only simple credit check is active (FD32), then only sales order value (with the help of the requirement A) will be cumulated and compared with the value maintained at FD32.
If the Automatic credit check activated (Static/Dynamic) for a customer, then the cumulative value (Open sales order + Open Delivery + Open billing + Open items) will be compared with the Maximum Document Value maintained in OVA8.
Even if Automatic Credit Control is not activated, Value maintained in Credit control area will be considered for new customers.
Is my understanding correct.
Regards,
Mullairaja
Dear Mullai Raja,
If only simple credit check is active (FD32), then only sales order value (with the help of the requirement A) will be cumulated and compared with the value maintained at FD32.
In simple credit check, check is carried out comparing total of the Open A/R + Open Item from Special G/L + Net sales order value(i.e. Current sales order where check is performed) with Credit limit given to the customer in FD32.
If the credit exposure is greater than the credit limit, the system sets the credit check status as u201Cfailu201D and shows a warning (If A), generates an error message (If B), or performs a delivery block (If C).
If the Automatic credit check activated (Static/Dynamic) for a customer, then the cumulative value (Open sales order + Open Delivery + Open billing + Open items) will be compared with the Maximum Document Value maintained in OVA8.
In case of Automatic credit check, cumulative value of Open sales order + Open Delivery + Open billing + Open items(A/R and Special G/L) is compared with credit limit maintained in Credit master FD32 for that customer and not with Maximum document Value.
Maximum document value is independent check without any reference with credit limit.
For Ex. Credit limit of Customer X is Rs. 1000
and Current credit Exposure(Open sales order + Open Delivery + Open billing + Open items) is Rs.600
and in OVA8 Max doc value is maintained as Rs. 200
Now if you try to create a sales order worth Rs. 400 system will block the order, even if customer is having enough credit limit to create a sales order worth rs. 400 because Max doc Value cannot be more than Rs. 200
Hope this helps.
Regards
Mayank
Edited by: Mayank Patel on Jan 23, 2011 12:51 PM
Dear Mr.Mr.Mayank,
Thank you very much for the explanation.
I have a doubt here. Customer Credit Limit is Rs.1000 as per your example (In FD32). Maximum document value is Rs.200 (in OVA8).
But you told told customer already having the credit exposure Rs.600.
If the system compares the maximum document value, how it will allow you to create the document value Rs.600 first. It should be block at the time itself right.
Kindly clarify my doubt.
Regards,
Mullairaja
Dear friend,
Max doc value is 200 it means you cannot create a document of value more than 200 but you can create any no. of doc of value 200 or less until credit limit available.
So it is possible to have exposure of 600 since there can be 3 or 4 or 5 doc of value less than 200.
hope it is clear now
Regards
Mayank
there are 3 types of cr chk basically-a.simple b.static c.dynamic cr chk
in simple cr chk the system will only chk the total cr limit of the payer and compare the same with value of the sales doc and all open items.
in static cr chk case the chking takes place by the following way
static cr chk compares the cr limit of the customer (payer) with the following
1.total value of all open sales ordertotal value of all open deliveries for which invoice yet to be createdtotal value of all billing documents for which account posting has not yet taken place+total value of all billing doc for which accounting doc have been generated but customer has not yet paid
in dynamic cr chk chking are same as static. it has a time frame attached to it which states that the system will not include sales orders in the total of outstanding items created after the specified time period.
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Hi
To my knowledge, these are two independent checks. System will do the credit limit check and even if the credit check is not failed...if that particular order value is more than the value specified for Max Document value...the document will be blocked.
Practically this kind of check is valid/required in many business scenarios in the market place. This kind of check will avoid the mis utilisation of credit limits offered to the customers. It is just my understanding.
Thanks,
Ravi
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BOTH. Any one negative will result in credit check.
For FD32 - Customer Credit Limit - Total value of All open documents is checked against this value
For Maximum Doc Value - as the term suggests - It will apply only to that specific document in process. i.e. the particular document (order/delivery) should not cross the Maxm. Doc. Value maintained for it.
Thanks
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