Credit Horizon

[Former Member]

Dear, I have a question regarding Credit Horizon, Lets Say we have a Payer with Credit Limit 1200EUR, there are no open item, no open billings and we are creating first order for this customer, Credit Horizon is 10 Days. Order Value is 1500 and the Delivery is in 20 Days, I assume that the order will not be block today, but will be blocked automatically in 10 Days by the system, is that correct? Thank you

[Former Member · Accepted solution]

Hi,

Credit Horizon means system will consider any open documents value that lies in that horizon period. In your case all the open documents of 10 days old will be considered as a credit check and if there is no open documents exist and you are creating an order of order value 1500 then system will block the order straight away as it exceeds the limit.

Lets consider simple example, you have created an order 5 days back value of 600 which is still open and today you are creating one more order value of 500, accumulating total which is 1100, system will not block the order. Now you process one more order worth of 200 after 4 days, assuming previous two orders are still open, system will block the third order as the total open value becomes 1300 which exceeds the limit. Please note all three open orders are within 10 days which is a horizon period.

Hope it gives your clear idea of credit horizon.

Regards,

Jay

[Former Member · Accepted solution]

yes, thank you, but what if the delivery of the third order (worth 200) is in 20 days? (it means outside the horizon) will it be blocked or not?

[hualin_zhang · Accepted solution]

In Jay's sample, if the third order is in 20 days, it will not be blocked.

When dynamic check is executed for the third item,

- if the 3rd item itself is in the horizon, system will compare the value of (1st SO + 2nd SO + 3rd SO) with the credit limit. If the value execeed credit limit, block the 3rd order.

- if the 3rd item itself is ouside the horizon, system will compare the value of (1st SO + 2nd SO) with the credit limit. If the value execeed credit limit, block the 3rd order. In this case, it doesn't execeed credit limit, so the 3rd SO will not be blocked.

For your origianl sample, you mention that "the order will not be blocked for today, but will by blocked automatically in 10 days. " I would like to say that this is not correct. For dynamic check, a plan of report RVKRED08 is necessary. This report checks all documents that reach the horizon. But if you don't plan it, the order will not be auto blockded.

For dynamic check, I suggest checking note 379007. This note explains the logic of dynamic credit limit check very detailedly. It is a famous note and worth reading.

Hope it helps.

Best regards,

Hualin - SAP

[Former Member]

Hi Shiva,

Once the credit is consumed by Payer lets us say in a Sales order.

The Horizon date in the Credit Master actually looks at these Sales order values in the specific Horizon Date during credit Calculation.

Thanks,

Ajay Kaushik YGR