Credit Management-->Best Solution

[Former Member]

Hi All,

My client's business is Automotive Industry and in automotive industry you've dealers who buy vehicles from the Business and in turn sell it to the end customers. The scenario in terms of financing is like this:

Business Scenario:

1) Dealers get sponsored by multiple Financial Institutions/ Banks.

2) The agreement between the Business and Banks is, as soon as a dealer orders for a vehicle, the Banks will pay within 24 hours of the order date.

3) Each banks sponsors multiple dealers and each dealer is sponsored by multiple banks and has different limits with each bank.

4) Dealer has a pyt terms of 30 days to pay to the Banks and we get no information on when, how much does the dealer pays?

Design/ Considerations:

Now from a Credit Mgt Master data perspective, I can't set up the banks as payers as they finance multiple dealers and the sales orders are against a dealer. So, we've decided to define/create the combination of each dealer and bank as a Payer.

And define credit limits for each such Payer. However, the issue is we're forced to update FD32 and change credit limits each day .. since the banks pay to the business within 24 hrs which clears the open items and exposure is reduced immediately. However the banks want to reduce the credit limit because the dealer hasn't paid to them yet.. so they want to update credit limits on a daily basis.

Now my questions: 1) How best to handle this scenario? 2) Updating FD32 on a daily basis effects performance and I believe I should run F.28 after each such update..

I've run through many ideas..but won't share here, pls pour in your ideas on how best to tackle this?

Regards,

Raghu.

[gomatheeswaran_palaniappa · Accepted solution]

Hi Rags,

I have a thought. Will customer payment guarantee procedure helps you?

Your payment guarantee is entirely depending on credit limit of your dealer. Please check if you can bring in any form of payment guarantees the dealer can produce, such as, Letter of credit by bank (usually we use it in export processing, though). This way bank can have control on your dealer's credit.

If your order value is 20000 USD and you have 15000 USD payment guarantee from bank. The remaining amount 5000 USD has to be managed through credit management with credit limit of the dealer.

So, Total value = open confirmed quantities * credit price (net value - taxes)

Guaranteed value = total value * guaranteed factor

Credit value = total value - guaranteed value

You can keep dealer as payer if you can capture payment guarantee such as payment card / letter of credit from bank. Please go through the below document, if my explanation is not proper.

[Credit management - page 51|http://help.sap.com/printdocu/core/Print46c/en/data/pdf/FIARCR/FIARCR.pdf]

Regards,

P Gomatheeswaran

[Former Member · Accepted solution]

Hi Gomatheeswaran,

Thats a good thought..but doesn't help me as this is a business process change and usually payment gaurantee is not much used in this industry. Thanks for your inputs, anyway.

Regards,

Raghu.

[former_member209761]

Dear Raghu,

Why do not you consider doing MASS change for the credit limit.

After mass, you need to run rvkred77 or rvkred88.

I would have suggested to develop a Z program (with Tcode and authorisation) which calls a BDC (record the process of changing fd32 credit limit) and call the program RVKRED77 for those customer codes alone.

I have done the MASS and RVKRED77 combination for one of my client as a one time activity. For daily usage, i am sure the Zprogam (BDC of FD32 + program RVKRED77) will solve your requirement.

Thanks & Regards,

Hegal K Charles

[Former Member]

Standard would be:

Every payer is a credit control account, every credit control account has a credit limit (perhaps 0).

Every sales order which would cause higher debts than the limit is blocked.

The payment should is nomally reducing the used limit.

Example:

Payer has a limit of 0.

Sales order is created with 20000 USD - and blocked.

Payment is done - and makes a negative usage of the limit.

-> Recheck of the sales order can be done -> manually in VA02 or using the reports RVKRED77,...

Sales order is unblockes and can be proceedes.

Greatings

Manuel

[Former Member]

thanks Charles..that is part of my problem..anyway will see if I can schedule it once in a day.

Manuel, sorry don't understand what you say..if you're talking about how std Cr Mgt works..then I think I know little bit, thanks for the info

Regards,

Raghu.