credit management

[Former Member]

dear gurus

my client wants to block the delivery as per if the payment terms exceeded but not credit limit exceeded.

pls help me and pls send me the screen shots for configuration

my email id raju_varma55@yahoo.com

[Former Member]

One customer buys 100mt per 100rupees = 10,000 payment terms 60days

that means total credit limit is 20,000.

1st month he did a business for 10,000

2nd month no business

3rd month 10,000

here system doesnot block asper credit limit given to customer. But the payment terms exceeded for 1st month so the system should block as per payment terms that means here two points are noted 1) credit limit, 2) payment terms which ever comes first the system should block.

pls send the configuration screen shots for the above requirement.pls................................................................................................

[Former Member]

Hi Satish,

Try the 'Oldest Open Item' option and specify number of days in OVA8.

Rgds,

Madhu

[Former Member]

Outstanding or uncorrectable receivables can spoil the success of the company greatly. Credit Management enables you to minimize the credit risk yourself by specifying a specific credit limit for your customers. Thus you can take the financial pulse of a Customer or group of customers, identify early warning signs, and enhance your credit-related decision-making. This is particularly useful if your customers are in financially unstable industries or companies, or if you conduct business with countries that are politically unstable or that employ a restrictive exchange rate policy

1.2 Features

If you are using both the SD and FI-AR components, Credit Management includes the following features:

 Depending on your credit management needs, you can specify your own automatic credit checks based on a variety of criteria. You can also specify at which critical points in the sales and distribution cycle (for example, order entry, delivery, goods issue) the system carries out these checks.

 During order processing, the credit representative automatically receives information about a customer’s critical credit situation.

 Critical credit situations can also be automatically communicated to credit management personnel through internal electronic mail.

 Your credit representatives are in a position to review the credit situation of a Customer quickly and accurately and, according to your credit policy, decide whether or not to extend credit.

You can also work with Credit Management in distributed systems; for example if you were using centralized Financial Accounting and decentralized SD on several sales computers.

1.3 Prerequisites

 You have implemented the Accounts Receivable (FI-AR) and Sales and Distribution (SD) application components.

 The master data for those customers whose credit you wish to monitor is created in both Sales and Distribution and Financial Accounting.

 The credit data for those customers whose credit you wish to monitor is created. You determine how high a customer’s credit limit is to be when creating this data.

 In Customizing for Enterprise Structures you defined one or more credit control areas and assigned these to one or more company codes.

 In Customizing for Sales and Distribution you defined at which point (when an order is received or when delivery is carried out, for example) the credit check should take place. You do this under

MENU PATH:

Basic Functions  Credit Management/Risk Management  Credit Management  Define Automatic Credit Control.

2. Credit control area

Definition

An organizational unit that represents the area where customer credits is awarded and monitored. This organizational unit can either be a single or several company codes, if credit control is performed across several company codes. One credit control area contains credit control information for each customer.

2.1 Creation of Credit Control Area

MENU PATH:

Enterprise Structure  Definition or  Assignment  Financial Accounting and then Maintain credit control area

2.2 Specifying Credit Limits by Credit Control Area

Credit management staff in the individual customer master records normally specifies credit limits. You can specify individual credit limits for each credit control area. You can expand your credit control for a customer by specifying a central credit limit for all credit control areas to which that customer is assigned. The total of the limits at the level of the credit control area must not exceed the total limit for all credit control areas. The credit limits at the control area level are checked during sales order processing.

2.3 Credit Limits for Groups of Customers

You can assign a credit limit to a group of customers, as well as to an individual customer. If a company has different branches, you would define the credit limit for just one customer in this group (the head office) and this customer account then becomes the credit account.

MENU PATH:

To assign a credit account to a branch account, from the Credit Management screen, choose Master data  Change.

2.4 Defining Credit Limits for New Customers

USE

If you create a master record for a new customer, but do not define any credit data, no credit control is performed for this customer. If you want a new customer to be automatically subject to credit control, then you need to create a credit control area for new customers.

MENU PATH:

In Customizing, choose Enterprise Structure  Definition  Financial Accounting  Maintain credit control area.

3 Processing Credit Data

All of the following functions are accessed from the Credit Management screen.

Function Menu path Further information

Changing Credit Data Master data  Change

Displaying Credit Data Master data  Display Displaying Credit Data

Making Mass Changes Master data  Mass changes The system may prevent you from making postings to customers if the date of the next credit limit check has already passed. To prevent this happening, you can reset the date to a later date for a certain specified number of customers.

Displaying Changes to Credit Data Master data  Display changes. To display changes to credit data on a cross-account basis, use report RFDKLIAB.

Deleting Credit Data Master data  Change.

Enter the name of your customer, the corresponding credit control area and select either Status or Central data.

Choose Credit management  Delete  Central data or Control area data.

Resetting Credit Limits Resetting Credit Limits

4. Resetting Credit Limits

USE

You need to reset credit limits if you have:

 Assigned a company code to a new control area

 Changed the assignment of company codes to control areas

 Changed the currency of a control area

 Altered the classification of a difference reason code from disputed to non-disputed (or vice versa).

4.1 Procedure

From the Credit Management screen, choose Tools  Reset credit limit.

5. Sales and Distribution Functions in Credit Management

All of the following information functions are accessed from the Credit Management screen.

Function Menu path

Processing blocked sales and distribution documents from a list  Exceptions  Blocked SD documents

Processing blocked sales and distribution documents from the SAPoffice inbox  Exceptions  Mail/inbox

Processing blocked sales orders Sales and distribution docs  Sales and distrib. documents blocked for delivery

Processing incomplete sales and distribution documents Sales and distribution docs  Incomplete SD documents

Processing deliveries Sales and distribution docs Deliveries

Processing billing documents Sales and distribution docs Billing documents

6. Automatic Credit Controls in SD

You can specify automatic credit checks to meet your own credit management needs. The checks can be carried out at various times during the sales order cycle, from order receipt to delivery. Within delivery processing, you can further specify that a credit check is carried out when a delivery is created or when goods are issued. You specify data for automated credit control in Customizing for Sales and Distribution.

7. Defining an Automated Credit Check

According to your credit policy, you define risk categories and assign them to individual customers, along with specific credit limits. In addition, you define credit groups for document types, known as document credit groups. Document credit groups combine order types and delivery types for credit control purposes. You can define a credit check for any valid combination of the following data:

 Credit control area

 Risk category

 Document credit group

MENU PATH:

SAP Easy Access -> Logistics -> Sales and Distribution -> Credit Management -> Master Data -> Change

8. Different Types of Credit Checks

You can define any of the following credit checks for various combinations of credit control area, risk category, and document credit group:

 Static Credit Limit Check

The customer's credit exposure may not exceed the established credit limit. The credit exposure is the total combined value of the following documents:

Open orders

Open deliveries

Open billing documents

Open items (accounts receivable)

 Dynamic Credit Limit Check with Credit Horizon

The customer's credit exposure is split into a static part; open items, open billing, and delivery values (see above), and a dynamic part, the open order value. The open order value includes all undelivered or only partially delivered orders.

 Maximum Document Value

The sales order or delivery value may not exceed a specific value which is defined in the credit check. The value is stored in the currency of the credit control area.

9. Subsequent Functions in Credit Checks

The result of each check is stored in the document and is used to calculate the overall status. The subsequent functions are the same for all the checks, namely credit limits, payment cards, export credit insurance, and documentary payments.

10. Features

Using the credit status, you can block the following functions during order processing:

 Creating material reservations

 Creating purchase requisitions

 Creating production orders/planned orders

 Creating delivery due indices

 Printing order confirmations

 Creating deliveries

In Shipping you can use the credit status to block the following functions:

 Picking

 Packing

 Posting goods issue

 Printing delivery notes

For particularly important or urgent credit problems, you can use output control to specify that electronic mail messages are automatically sent to the appropriate credit representative.

11. How to Release a Credit block

Generally this credit release goes with authorized person. And he/she can release the credit block at various stage in a order processing example during sales order / delivery / PGI. The General transaction code which is used to release the sales order is VK13 or you can use VK11 to release a credit block for the credit account.

[Former Member]

Hello Satheesh Raju,

<b>**Do reward if this helps you**</b>

http://sap-img.com/sap-sd/credit-management.htm

For Screen Shots just go thru these

Pls go through the links hope those will answer u r query

http://help.sap.com/saphelp_45b/helpdata/en/8e/1c4b6e5733d1118b3f0060b03ca329/content.htm

http://help.sap.com/saphelp_45b/helpdata/en/7f/1d85347860ea35e10000009b38f83b/frameset.htm

Pl go thr below links on Credit Management:

http://sap-img.com/sap-sd/credit-management.htm

http://academic.uofs.edu/faculty/gramborw/sap/crm.htm

http://www.sap-basis-abap.com/sapsd012.htm

http://help.sap.com/printdocu/core/Print46c/en/data/pdf/SDBFCM/SDBFCM.pdf

http://sap-img.com/sap-sd/credit-management.htm

http://www.sap-img.com/sap-sd/credit-management.htm

http://help.sap.com/saphelp_47x200/helpdata/en/93/74382d546011d1a7020000e829fd11/frameset.htm

http://sap-img.com/sd025.htm

http://sap-img.com/sap-sd/mrp-block.htm

http://sap-img.com/sap-sd/credit-management.htm

Types of credit check

The following types of credit checks can be carried out:

Static credit limit check

Credit allocation depends on the total value of open orders, deliveries, billing documents and open items.

Dynamic credit limit check

The dynamic check includes both a static part which checks all open items, deliveries and billing documents and a dynamic part which checks all outstanding order values, that is, all orders not yet delivered or partially delivered. The value resulting from the checks is accumulated up to the shipping date in the information structure "S066" in freely definable time units or periods (day, week, month). This information structure is entered in Logistics Controlling and described in the section "Carry out default settings for credit management" under Basic functions.

To define the credit check, you specify a certain number of relevant periods from which a date in the future can be calculated (for example, 10 days or 2 months depending on the selected period). This ensures that sales orders which lie further in the future are not used to determine the credit exposure.

The total of the static and dynamic part of the check must not exceed the granted credit limit.

Credit check on the basis of the maximum document value

The sales order value or the value of goods to be delivered must not exceed a certain value defined for the credit check. The value is stored in the currency of the credit control area. In particular, this check is useful if the credit limit of new customers has not yet been specified. This check can be accessed explicitly by a risk class reserved for new customers.

Credit check when changing critical fields

The credit check is started when changes are made to credit-relevant document fields so that they differ from the default values proposed from the customer master record (terms of payment, value days and fixed value date).

Credit check at the time of the next internal check

The credit check is started automatically on a certain date. All sales orders entered up to this time are regarded as not critical.

Credit check on the basis of overdue open items

The ratio between open items, which are overdue by more than a certain number of days, and the customer balance must not exceed a certain percentage.

Credit check on the basis of the oldest open items

The oldest open item may only be a certain number of days overdue.

Credit check against maximum allowed dunning levels

The dunning level of the customer may only assume a certain maximum value.

Customer-specific credit checks

If you require further checks to those defined in the standard system, you can define them in the corresponding user exits (LVKMPTZZ and LVKMPFZ1).

Requirements

In the No Check field, you can enter the number of a requirement with which you can control when credit checks are not carried out. You can deactivate some or all checks. This allows fine tuning on an individual basis for defining credit-relevant transactions and when credit checks do not need to be carried out.

You can also reset the credit document status.

Requirements are stored as routines. For further information on routines, see the IMG of SD under Routines. The two following example routines are supplied in the standard system. You can display and edit them using transaction VOFM:

1 Order

2 Delivery

You can copy and change these routines according to your own requirements. The routines contain different example scenarios in which credit checks would not be carried out.

Regards

AK

[Former Member]

Hi Satish,

Sent mail.

reward points if it helps

regards

Srini

[Former Member]

Dear Narayana

In ova8 horizon field is there how to map the payments terms.example as per my client requriement.

One customer buys 100mt per 100rupees = 10,000 payment terms 60days

that means total credit limit is 20,000.

1st month he did a business for 10,000

2nd month no business

3rd month 10,000

here system doesnot block asper credit limit given to customer. But the payment terms exceeded for 1st month so the system should block as per payment terms that means here two points are noted 1) credit limit, 2) payment terms which ever comes first the system should block.

pls send the configuration screen shots for the above requirement.pls................................................................................................

[Former Member]

Hi Satish.,

You can use in OVA8 payment terms you can you and map the process in delivery try it out

REWARD if helpfull

Thanks & Regards

Narayana

[Former Member]

Dear Narayana

In ova8 horizon field is there how to map the payments terms.example as per my client requriement.

One customer buys 100mt per 100rupees = 10,000 payment terms 60days

that means total credit limit is 20,000.

1st month he did a business for 10,000

2nd month no business

3rd month 10,000

here system doesnot block asper credit limit given to customer. But the payment terms exceeded for 1st month so the system should block as per payment terms that means here two points are noted 1) credit limit, 2) payment terms which ever comes first the system should block.

pls send the configuration screen shots for the above requirement.pls................................................................................................

[Former Member]

Hi Satish.,

This is a good quostion, For this you can use Dynamic Dynamic check in which you can specify the horizon date as 60 days as which is in payment terms, So as per your example system doesnt allow to raise order

REWARD if helpfull

Thanks & Regards

Narayana

[Former Member]

pls send screen shot for that who to configure.

it will helpful for configure settings very urgent.

[Former Member]

Hi.,

Cjheck your mail id.,

REWARD if helpfull

Thanks & Regards

Narayana

[Former Member]

dear sir

i tried but result not getting pls send the whole configuration to my email id plssssssss very urgent........................

[Former Member]

dear narayana garu

pls help me regarding that credit management issue.

[Former Member]

Hi Satish.,

Can you say the problem where you are getting the problem.,

Thanks & Regards

Narayana

[Former Member]

configuration level

[Former Member]

pls put horizon period for 2 months... in OVA8.. that means after 60 days if customer will not pay the first 10,000/- he will get block there.. in subtotal put A for net value in pricing procedure..

Reward if it helps.

Ramki