Query regarding credit check with payment terms

[Former Member]

Hello SAP Gurus,

I have a query regarding payment terms with credit check. Explaining with example below :-

For a customer, credit limit is 5000 INR in FD32 and 15 days credit limit in customer master.

If one invoice is made of 4500 INR today and another invoice is made of say 1000 INR after 5 days

then delivery should not be blocked in that case. I want blocking if both the conditions not fulfilled by

the customer which is credit limit goes more than the amount given in FD32 plus credit days are over

than the payment terms days assigned in customer master. How i can achieve this through configuration.

Thanks & Regards

Deven

[jignesh_mehta3 · Accepted solution]

Hello Deven,

I believe you need to set the Oldest Open Item credit check on T-Code OVA8 with necessary Reaction & Status/Block. Also set Days Oldest Item as 1.

This will ensure that once any Outstanding Invoice is overdue by 1 day, system will block the Customer's Sales document.

Thanks,

Jignesh Mehta

[Former Member · Accepted solution]

Thanks for quick reply Jignesh,

I have done what you have said, but still getting error of credit check. You can see in screenshots what i have done in OVA8 also the error screen.

   OVA8

  DELIVERY

[jignesh_mehta3 · Accepted solution]

Hello Devan,

Then I would say system is working as expected. That is either the Credit limit is exceeded or if the Customer of Unpaid Overdue item for more than 1 day, the Sales transaction is blocked.

Can you rephrase or explain your requirement in detail?

Thanks,

Jignesh Mehta

[former_member187236 · Accepted solution]

Dear Devan,

You can go ahead with the attached settings in your system.

But make sure you have to test it properly, for that i suggest create a new customer, and then assign risk cat. to him.

In customer master assign the payment term of 1 day or immediate.

And then test the scenario in various combinations...

I believe this will give you proper guidance on the issue.

And along with that you can go through the below mention doc for understanding the meaning of every field we have tick here and how Credit mgmt works.

http://scn.sap.com/docs/DOC-28086

Step by Step Credit Mgmt Configuration | SCN

[Former Member · Accepted solution]

No Jignesh i made the new customer with 15 days credit limit (payment terms) yesterday and made one invoice for the customer and today i am making another invoice for the same customer though the amount is getting more than the limit assigned in FD32 and it is blocking the delivery but according to the need, it should not be blocked because of 15 days payment terms.

[Former Member · Accepted solution]

Thanks Parag,

I'll check and reply.

[jignesh_mehta3 · Accepted solution]

Hello Deven,

Here we are talking of two different Credit Checks:

1. Check on Credit Limit

2. Check on Oldest open item.

The credit block you are getting while creating Delivery in the above screen is due to the fact that the Customer has exceeded his Credit Limit. For Example the Credit limit is Rs. 10,000 and earlier transaction was for rs. 8,000 and current transaction is for Rs. 3,000 the second one will be blocked (in your case it is Rs. 606).

Now imagine a scenario after fifteen days. The Invoice for Rs. 8,000 becomes due for payment and Customer has not paid it. And you create a Sales transaction for Rs. 1,000 (total Credit exposure is Rs. 8,000 + Rs. 1,000 = Rs. 9,000) which is within Credit limit of Rs. 10,000) still the transaction will be blocked because there is a Oldest open item for more than 1 day.

Just click on the question mark in the Credit Limit exceed message and you will come to know which check is NOT OK.

Thanks,

Jignesh Mehta

[Former Member · Accepted solution]

Ok Parag, i have tested as per the settings you have given also done with different settings in OVA8 and made a new customer for this but didn't get the desired result. Is it possible through configuration or should i use any user exit ? Pls help.

[jignesh_mehta3 · Accepted solution]

Hello Deven,

Did you got a chance to go through the explanation that I gave in above post regarding different types of Credit Checks that you are referring to?

Thanks,

Jignesh Mehta

[Former Member · Accepted solution]

Yes Jignesh I went through the explanation of your post and checked the credit message while creating delivery. I found that credit limit is exceeding the amount given in FD32 which is NOTOK. You can see in the attached screenshot.

How can i control this for my requirement ?

[jignesh_mehta3 · Accepted solution]

But Deven, the system is working as expected. Since in above case the Credit Limit has exhausted, the Sales transaction is blocked for further processing.

Similarly after 15 days, even if Credit Limit is available and oldest open item is overdue (not paid for) Sales transaction would be blocked due to failure of Oldest Open Item check.

Thanks,

Jignesh Mehta

[Former Member · Accepted solution]

Ok Thanks Jignesh i can understand that its a standard behavior  but can we control this through any user exit because i want to give some percent relaxation to the customer in credit amount if exceeds though the credit days are not over. Block only in the case where both the conditions are over. Pls Help.

[former_member187236 · Accepted solution]

Well Deven,

I have face some what similar scenario where customer has got maintain X credit limit and 30 days of payment term.

So which ever exceeds the SO will get block.

Client want to consider the Open order, Open items and next review dates in credit check.

So this config worked fine in my case and that without any user-exits or enhancements.

I can only say that you have to test the scenario but need to understand the config first.

Regards

Parag.

[jignesh_mehta3 · Accepted solution]

Hello Deven,

OK, so you want to block Sales Transactions only in case of BOTH Credit Limit and Oldest Open Item has failed. If the Customer has exceeded Credit Limit, but if there are no Open Items, you would like to allow the Sales Transactions.

Going by my experience, I would not recommend Z-Development in Credit Management.

Anyways is this fixed requirement for all the Customers or only for some of the Customers?

If it is for all the Customers, there is a section - Credit Limit Seasonal Factor in Transaction - OVA8 where you can enter Percentage. So for example if you enter 20% there, the Credit Limit of the Customer would be increased by 20%, before the transaction start getting blocked.

If this requirement is for specific Customers, you can draw a Z-Table with Customer Code and allowed Percentage and put up a Custom code in User Exit - LVKMPFZ1. Please get this explored with help of your ABAPer.

Still I would suggest to stick to SAP Standard settings and recommend not to implement Custom codes in Credit Management.

Thanks,

Jignesh Mehta

[Former Member · Accepted solution]

Hello Jignesh,

Thanks for the reply again. Actually we have many customers with different payment terms so i think seasonal factor would not go for me. I think i may choose Z-development also the error for credit limit should be treated as warning during delivery creation till both the conditions get crossed for that customer.

Thanks

Deven

[Former Member · Accepted solution]

Hello Jignesh,

After discussing more with my client we have come to the point finally that credit check is required based on payment done by the customer. For example - if a customer has done 90% payment then open orders & delivery will not be blocked. How can i achieve this ?

Thanks

Deven

[jignesh_mehta3 · Accepted solution]

Hello Deven,

Based on your below statement:

credit check is required based on payment done by the customer. For example - if a customer has done 90% payment then open orders & delivery will not be blocked

Can I assume that you do not want the Credit Check based on Credit Limit? I mean if the Credit Limit is Rs. 2,00,000 and open orders, deliveries, Invoices and payments are more than Rs. 2,00,000 system should not block the Transaction?

I mean you just want to check whether 90% payment is done or not? If yes, You can activate the Open Item Check in Transaction OVA8 and set the Max.open.item % at 10. This would mean that if more than 10% overdue Payments are over due, system will block Sales Documents of the Customers.

Thanks,

Jignesh Mehta

[Former Member · Accepted solution]

Yes you are correct Jignesh, after your reply that's what i have done in OVA8 in dynamic check. Screenshot below - Pls Check, is it OK ?

[jignesh_mehta3 · Accepted solution]

Hello,

I would suggest you to try in the system yourself.

Only note, you have mentioned the reaction as C, which means just a warning message and transaction will not be blocked. Press F4 in the reaction to see the options for Blocking the transactions.

Thanks,

Jignesh Mehta

[Former Member · Accepted solution]

Hi Jignesh,

Thanks a lot for your help.

For customers having credit limit in FD32, its working fine.

A further help required in case of immediate due customers where customer is having advance payment terms and PGI should not be done until advance comes. How can i get this ?

Thanks

Deven