on 07-17-2011 7:15 AM
What is the difference between a simple , static , dynamic credit check and how will it get reflected in the sales order......Kindly explain it with an example what will be the effect on the sales order if we select static or dynamic credit check ....
Thanks.
Edited by: Lakshmipathi on Jul 18, 2011 11:48 AM Please AVOID posting such repeated questions in the forum. Better try to search before posting and dont try to deviate the forum rules
OK Prassana.... I will do so as soon as l get my answer........
You must be a registered user to add a comment. If you've already registered, sign in. Otherwise, register and sign in.
Thanks Saju,
Incase of dynamic credit management, what does ' a horizon of 2 months will be used to exclude all order for which the delivery has to be beyond the stipulated horizon ' mean.......???
Also what difference will it make while creating the sales order by choosing different credit check....??
You must be a registered user to add a comment. If you've already registered, sign in. Otherwise, register and sign in.
Thanks Prassana...
You must be a registered user to add a comment. If you've already registered, sign in. Otherwise, register and sign in.
Hi,
Types of Credit Management
Types of credit checks:
1. Simple credit check
2. Dynamic Credit check
1. Static Credit Check
2. Dynamic Credit Check
Simple Credit Check
This is very similar to the example we have discussed earlier. Simple credit check compares the Customeru2019s credit limit to the total of all the items in the order and the value of all open items.
Credit Exposure in Simple Credit Check = Value of all Open Items + Value of the Current Sales Order.
Open items are orders that have been invoiced to the customer but the payment for the invoices have not been received yet. The system can be configured to either block the delivery, send a warning or an error message when the credit exposure has exceeded the credit limit of the customer.
Dynamic Credit Check
Simple Credit Check alone is not sufficient for most businesses. Instead of just considering open items only, there is a need to consider existing open orders and open deliveries as well. Also, for old and seasoned customers, even if the credit exposure exceeds the credit limit set for the customer, the order can still be processed because of the good payment history with the company.
However, for new customers credit needs to be strictly monitored. For the purpose of Credit Management, SAP allows us to recategorize customers into different u2018Risk Categoriesu2019. Some examples of risk categories could be Medium Risk, High Risk, Low Risk etc.
Dynamic Credit Management can be broadly divided into 2 components.
Static Credit Check Open Deliveries + Open Invoices + Open Items
Dynamic Credit Check Open Sales Order Value with a Time period ( Called Time Horizon )
Horizon:
The use of time horizon can be best explained with an example. Most orders for the holiday season are pre-ordered because of the holiday rush. Orders might start to pile in as early as June, July. The delivery however is to be done in November or December.
For example, in August , Order A for $ 50,000 is a Pre-Ordered to be delivered in November.
Similarly for the month of December, another order, Order B is placed for $ 40,000 to be delivered in December.
In case of static credit check, the credit exposure is already $ 90,000. If a regular order is placed in August for another $ 30,000 the credit exposure would exceed the credit limit of $ 100,000. However, in case of dynamic credit check, a horizon of say 2 months would be used to exclude all orders for which the delivery has to be beyond the stipulated horizon.
So, order C would not be blocked in case of dynamic credit check.
Regards
Saju.S
You must be a registered user to add a comment. If you've already registered, sign in. Otherwise, register and sign in.
Hi,
Kindly Check the Link ,
http://help.sap.com/printdocu/core/print46c/en/data/pdf/FIARCR/FIARCR.pdf
http://www.magnatraining.com/sap-credit-management/
Regards,
Prasanna
Edited by: prasanna_sap on Jul 17, 2011 8:46 AM
You must be a registered user to add a comment. If you've already registered, sign in. Otherwise, register and sign in.
User | Count |
---|---|
110 | |
12 | |
11 | |
6 | |
5 | |
4 | |
4 | |
3 | |
3 | |
3 |
You must be a registered user to add a comment. If you've already registered, sign in. Otherwise, register and sign in.