Credit management Issue

[Former Member]

hi ppl

Can any one of you send me documents on Credit managment config stuff on my mail id.

natasha.anandam@gmail.com.

Regards

Natasha....

[former_member194164 · Accepted solution]

Hi Natasha,

sent mail at your e/mail.

reward if stuff sent by me is useful to you.

regards

vikas chhabra

[Former Member · Accepted solution]

thanx

[Former Member]

Hi please follow following steps

Purpose

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.

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.

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

4. Why credit management is necessary in sales and distribution

processes?

Credit Management is used to:

 Set credit limits to various customers

 Monitor the set credit limits while creating orders, deliveries & goods issues.

 Decide the further course of action in case of credit failure

5. At what all levels can one institute a credit check?

Credit check in SAP can be instituted at 3 levels.

 Sales order level

 Delivery level

 Goods issue level

6. With respect to which partner function, credit is evaluated?

Payer

7. What is the basic formula based on which the credit is

evaluated?

Credit is evaluated based on the formula shown below:

If (Customer Credit Limit) – (Credit Exposure) >= Current Document Value, then the document passes the credit check. Else, the document fails in credit check and is further blocked for subsequent processing based on the settings we make.

Credit Exposure = All open orders + All open deliveries + All open bills + All Accounts Receivables

Open Sales Value = All open orders + All open deliveries + All open bills

Hence Credit Exposure = Open Sales Value + A/C Receivables

8. Define the terms Credit group& Risk Category

Credit Group: This is the indicator which decides at what level the credit check is happening. For example if the credit group is 1, we can say that credit is happening at Order level. If it has a value 2, it means that credit check is instituted at delivery level. Finally if it has a value 3 it means that credit check is happening at Goods issue level.

Risk Category: It is the categorizing customers into different groups from credit view point based on their credit worthiness and payment history.

9. Define credit control area and to what all is it assigned to?

Credit control area is that organizational unit responsible for controlling credit-related activities in a company/company code.

It is assigned to:

 Company code as well as

 Sales area

A single credit control area can monitor credit activities of more than one Company codes. In the figure shown below, CCCA credit control area is controlling credit related activities of BA01 and PA01 Company codes.

On the other hand, each company code can individually have a credit control area assigned to it. This is depicted in the fig shown below.

On the other hand, each company code can individually have a credit control area assigned to it. This is depicted in the fig shown below.

NOTE

A single credit control area can monitor credit-related activities of more than one company codes. However vice versa is not true i.e. a single company code can not be handled by more than one credit control areas.

This is depicted in the below shown figure. BA01I Company code is controlled by Indian Credit control area as well as US Credit control area, which is not permitted.

10. What are various pre-requisites required for Credit

Configuration to work?

1. Define credit control area (CCA)

2. Assign CCA to company code (2.A), sales area (2.B) & Customer master (2.C).

3. Activate credit at item category level

4. Give a value “A” to subtotal column, net value row in pricing procedure.

11. Define credit control area (CCA)

In the IMG Path shown above, click on Define Credit Control area and you will be faced with the screen shown below.

In this screen go for “New Entries” (F5 from key board) and you will be faced with the below given screen.

As shown in the above screen, enter a code for credit control area and a meaningful description. Enter Currency, UPDATE GROUP, and Fiscal Year Variant. Save settings and go back

You will be faced with the below shown screen on execution. Go to Position, select your Company code and assign the just now created credit control area.

12. Assign to sales area

On execution of the function as shown in the above path, you will be faced with the below given screen where in you need to go to position, find out your sales area and assign credit control area.

13. Assign to Customer master

Go to PAYER Customer Master via XD02 and go to Sales area data Billing Tab. Assign the just now defined credit control area here

14. Activate credit at item category level

Go to the path IMG Sales and Distribution  Basic Functions  Credit Management/Risk Management  Credit Management/Risk Management Settings  Determine active receivables per item category as shown below.

On execution, you will be faced with the below given screen wherein you need to select the item category (TAN) and activate credit check box.

NOTE: This setting can directly be done in VOV7 also instead of following this path as shown below. If setting is changed in VOV7, it affects in the above screen and vice-versa.

15. Give a value “A” to subtotal column, net value row in pricing procedure.

Go to V/08 transaction code, go to position and select your pricing procedure. Highlight the pricing procedure and dbl click on the control folder (left side).

On dbl clicking, you will be confronted with the screen shown below. In this screen, give a value “A” to net value row and subtotal column as shown below.

This setting transfers the value of “Net Value” to KOMP-CMPRE. KOMP-CMPRE is Credit Price field. Once the Net value is available in KOMP-CMPRE, it can be accessed by other credit components and updating happens. In case, if this setting is not made, updating of FD32 value will not happen.

16. Simple credit check

16.1 Describe basic features of simple credit check?

Simple credit check as the name infers is the simplest form of credit check which is seldom used in business because of its drawbacks discussed later in this section. The basic features of simple credit check are:

 It can be instituted only at order level

 It is evaluated on the basic rule that

(Customer Credit limit ) – (A/C receivables) >= (Current Order value)

16.2 Limitations

Simple credit check can not take:

 Risk category of customer into consideration

 Credit group into consideration

Let us consider two customers C1 and C2. Assume C1 always makes a prompt payment and has very good payment history. On the other hand assume the C2 is a bad payer who doesn’t clear bills promptly and has a bad payment history.

In this above said case, general as well as business perception is that, C1 should be given priority over C2 from credit view point at least i.e.. If an order of C1 is blocked, system should just give a WARNING and let the document be saved and in case of C2 it should pop up an ERROR thus not allowing the order to be saved. This is not possible with Simple credit check i.e... irrespective of the RISK CATEGORY, system responds in a similar fashion.

Further, this check can be instituted only at order level, and hence is independent of CREDIT GROUP.

16.3 How do you configure Simple Credit Check?

Follow the path IMGSales and Distribution Basic FunctionsCredit/Risk ManagementSimple credit limit check as shown in the figure below.

Go to Position Select ORGive either of A, B or C for “Check Credit” column and leave “Credit Group” blank as shown below.

We need to select either A, B or C for the column “Check Credit” because, all these three are used for instituting simple credit check as described in the description for A, B and C respectively.

Further one should not specify credit group because we are aware that simple credit group is independent of credit group (as discussed in the “Limitations” section of simple credit check). If one specifies a credit group with A, B or C values, the error as shown below will be encountered.

17. Setting credit limits for Customer(Customer Credit Master)

Go to FD32 Transaction code and enter the values as shown below

17.1 Overview Screen

Overview screen looks as shown below. It is the gist of all other tabs. It is the collection of data acquired from other tabs like Central Data Screen, Status Screen etc. So just give a single look or ignore this screen.

17.2 Address Screen

This screen contains the address-related data of PAYER. This data is a carbon copy of data given in Customer Master (XD01) for the Payer. So this even can be given a single look or ignored.

17.3 Central Data

This is an important screen where you need to pay little attention. We can enter values for fields “Total Amount” and “Individual Limit” here.

Total Amount is the Maximum permissible credit limit for this customer across all credit control areas.

Consider the following example. Say customer 18 is buying Chips from Indian Company Code (TSLI) as well as US Company code (TSLU). Also assume that TSLI and TSLU are managed by individual credit control areas.

In the example shown above, Total Amount is nothing but the maximum credit that 18 is entitled to in both CCA India as well as CCA US put together.

Let us consider that this limit is now say 5 Lakhs.

How this 500 should now be distributed among CCAI and CCAU? It can be in any combinations ranging from 0 to 500 out of which some combinations are as shown below.

17.4 Status Page

This is the most important screen of FD32, which gives us a complete understanding of customer’s credit situation.

Here we have to enter the exact credit limit customer 18 is entitled to in the credit control area BARR. The value we give here should not exceed the value of Individual Limit field given in the earlier screen (Central Data screen). Save these settings and this completes Simple credit check configurations and FD32 setup required for simple credit check.

Creating an order and Checking whether Simple credit check is properly functioning or not

Step1: Got to va01 and select Document type.

Step2: Give customer, material and a quantity whose worth would be more than the

Permissible credit limit. You will be faced with the following error.

Press button. Now go to header details by clicking and then to STATUS tab page. You will find the CREDIT STATUS FIELD as BLOCKED. Hence this order can not be delivered unless the block is removed.

To release this order from credit block, go to transaction code VKM4  select the order click green flag Save. (This will be explained in greater detail afterwards).

NOTE

When a document is blocked by credit, no updating happens to any of information structures S066, S067 and hence FD32 values also remain unchanged.

18. Automatic credit check

Automatic credit check is yet another type of credit check offered by with enhanced capabilities compared to simple credit check.

Define risk categories

Go for new entries (f5) and name various risk categories for your credit control area

One can now define credit groups if felt necessary

Next step is to assign credit groups to sales and del documents

You will be faced with the below given screen on executing the above shown step. Note that here we have options to do credit settings at all the three order, del and goods issue level (as shown below) as we are working on automatic credit check.

Now if we choose the first option, we will be faced with a screen (as shown below) wherein we can define settings at order level.

Go to position and search for ZOR

Now one has to select a value D for check credit column and value 01 for credit group column. This is because 01 corresponds to Order Level and D corresponds to Automatic credit check.

Now let us assign Credit Groups for Del and Goods Issue. Go to position and search for LF. Assign values for credit groups as shown below.

Note that A, B, C, D values are not given here in this screen because it is programmatically understood that as we are working at del and goods issue level, check credit value will be automatically D.

Now one has to do Settings for Automatic Credit Control. Go back and execute the relevant function as shown below

You will be faced with the below shown screen on execution.

Go for BARR entries and you will be faced with the below given screen

[Former Member]

Purpose

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.

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.

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

4. Why credit management is necessary in sales and distribution

processes?

Credit Management is used to:

 Set credit limits to various customers

 Monitor the set credit limits while creating orders, deliveries & goods issues.

 Decide the further course of action in case of credit failure

5. At what all levels can one institute a credit check?

Credit check in SAP can be instituted at 3 levels.

 Sales order level

 Delivery level

 Goods issue level

6. With respect to which partner function, credit is evaluated?

Payer

7. What is the basic formula based on which the credit is

evaluated?

Credit is evaluated based on the formula shown below:

If (Customer Credit Limit) – (Credit Exposure) >= Current Document Value, then the document passes the credit check. Else, the document fails in credit check and is further blocked for subsequent processing based on the settings we make.

Credit Exposure = All open orders + All open deliveries + All open bills + All Accounts Receivables

Open Sales Value = All open orders + All open deliveries + All open bills

Hence Credit Exposure = Open Sales Value + A/C Receivables

8. Define the terms Credit group& Risk Category

Credit Group: This is the indicator which decides at what level the credit check is happening. For example if the credit group is 1, we can say that credit is happening at Order level. If it has a value 2, it means that credit check is instituted at delivery level. Finally if it has a value 3 it means that credit check is happening at Goods issue level.

Risk Category: It is the categorizing customers into different groups from credit view point based on their credit worthiness and payment history.

9. Define credit control area and to what all is it assigned to?

Credit control area is that organizational unit responsible for controlling credit-related activities in a company/company code.

It is assigned to:

 Company code as well as

 Sales area

A single credit control area can monitor credit activities of more than one Company codes. In the figure shown below, CCCA credit control area is controlling credit related activities of BA01 and PA01 Company codes.

On the other hand, each company code can individually have a credit control area assigned to it. This is depicted in the fig shown below.

On the other hand, each company code can individually have a credit control area assigned to it. This is depicted in the fig shown below.

NOTE

A single credit control area can monitor credit-related activities of more than one company codes. However vice versa is not true i.e. a single company code can not be handled by more than one credit control areas.

This is depicted in the below shown figure. BA01I Company code is controlled by Indian Credit control area as well as US Credit control area, which is not permitted.

10. What are various pre-requisites required for Credit

Configuration to work?

1. Define credit control area (CCA)

2. Assign CCA to company code (2.A), sales area (2.B) & Customer master (2.C).

3. Activate credit at item category level

4. Give a value “A” to subtotal column, net value row in pricing procedure.

11. Define credit control area (CCA)

In the IMG Path shown above, click on Define Credit Control area and you will be faced with the screen shown below.

In this screen go for “New Entries” (F5 from key board) and you will be faced with the below given screen.

As shown in the above screen, enter a code for credit control area and a meaningful description. Enter Currency, UPDATE GROUP, and Fiscal Year Variant. Save settings and go back

You will be faced with the below shown screen on execution. Go to Position, select your Company code and assign the just now created credit control area.

12. Assign to sales area

On execution of the function as shown in the above path, you will be faced with the below given screen where in you need to go to position, find out your sales area and assign credit control area.

13. Assign to Customer master

Go to PAYER Customer Master via XD02 and go to Sales area data Billing Tab. Assign the just now defined credit control area here

14. Activate credit at item category level

Go to the path IMG Sales and Distribution  Basic Functions  Credit Management/Risk Management  Credit Management/Risk Management Settings  Determine active receivables per item category as shown below.

On execution, you will be faced with the below given screen wherein you need to select the item category (TAN) and activate credit check box.

NOTE: This setting can directly be done in VOV7 also instead of following this path as shown below. If setting is changed in VOV7, it affects in the above screen and vice-versa.

15. Give a value “A” to subtotal column, net value row in pricing procedure.

Go to V/08 transaction code, go to position and select your pricing procedure. Highlight the pricing procedure and dbl click on the control folder (left side).

On dbl clicking, you will be confronted with the screen shown below. In this screen, give a value “A” to net value row and subtotal column as shown below.

This setting transfers the value of “Net Value” to KOMP-CMPRE. KOMP-CMPRE is Credit Price field. Once the Net value is available in KOMP-CMPRE, it can be accessed by other credit components and updating happens. In case, if this setting is not made, updating of FD32 value will not happen.

16. Simple credit check

16.1 Describe basic features of simple credit check?

Simple credit check as the name infers is the simplest form of credit check which is seldom used in business because of its drawbacks discussed later in this section. The basic features of simple credit check are:

 It can be instituted only at order level

 It is evaluated on the basic rule that

(Customer Credit limit ) – (A/C receivables) >= (Current Order value)

16.2 Limitations

Simple credit check can not take:

 Risk category of customer into consideration

 Credit group into consideration

Let us consider two customers C1 and C2. Assume C1 always makes a prompt payment and has very good payment history. On the other hand assume the C2 is a bad payer who doesn’t clear bills promptly and has a bad payment history.

In this above said case, general as well as business perception is that, C1 should be given priority over C2 from credit view point at least i.e.. If an order of C1 is blocked, system should just give a WARNING and let the document be saved and in case of C2 it should pop up an ERROR thus not allowing the order to be saved. This is not possible with Simple credit check i.e... irrespective of the RISK CATEGORY, system responds in a similar fashion.

Further, this check can be instituted only at order level, and hence is independent of CREDIT GROUP.

16.3 How do you configure Simple Credit Check?

Follow the path IMGSales and Distribution Basic FunctionsCredit/Risk ManagementSimple credit limit check as shown in the figure below.

Go to Position Select ORGive either of A, B or C for “Check Credit” column and leave “Credit Group” blank as shown below.

We need to select either A, B or C for the column “Check Credit” because, all these three are used for instituting simple credit check as described in the description for A, B and C respectively.

Further one should not specify credit group because we are aware that simple credit group is independent of credit group (as discussed in the “Limitations” section of simple credit check). If one specifies a credit group with A, B or C values, the error as shown below will be encountered.

17. Setting credit limits for Customer(Customer Credit Master)

Go to FD32 Transaction code and enter the values as shown below

17.1 Overview Screen

Overview screen looks as shown below. It is the gist of all other tabs. It is the collection of data acquired from other tabs like Central Data Screen, Status Screen etc. So just give a single look or ignore this screen.

17.2 Address Screen

This screen contains the address-related data of PAYER. This data is a carbon copy of data given in Customer Master (XD01) for the Payer. So this even can be given a single look or ignored.

17.3 Central Data

This is an important screen where you need to pay little attention. We can enter values for fields “Total Amount” and “Individual Limit” here.

Total Amount is the Maximum permissible credit limit for this customer across all credit control areas.

Consider the following example. Say customer 18 is buying Chips from Indian Company Code (TSLI) as well as US Company code (TSLU). Also assume that TSLI and TSLU are managed by individual credit control areas.

In the example shown above, Total Amount is nothing but the maximum credit that 18 is entitled to in both CCA India as well as CCA US put together.

Let us consider that this limit is now say 5 Lakhs.

How this 500 should now be distributed among CCAI and CCAU? It can be in any combinations ranging from 0 to 500 out of which some combinations are as shown below.

17.4 Status Page

This is the most important screen of FD32, which gives us a complete understanding of customer’s credit situation.

Here we have to enter the exact credit limit customer 18 is entitled to in the credit control area BARR. The value we give here should not exceed the value of Individual Limit field given in the earlier screen (Central Data screen). Save these settings and this completes Simple credit check configurations and FD32 setup required for simple credit check.

Creating an order and Checking whether Simple credit check is properly functioning or not

Step1: Got to va01 and select Document type.

Step2: Give customer, material and a quantity whose worth would be more than the

Permissible credit limit. You will be faced with the following error.

Press button. Now go to header details by clicking and then to STATUS tab page. You will find the CREDIT STATUS FIELD as BLOCKED. Hence this order can not be delivered unless the block is removed.

To release this order from credit block, go to transaction code VKM4  select the order click green flag Save. (This will be explained in greater detail afterwards).

NOTE

When a document is blocked by credit, no updating happens to any of information structures S066, S067 and hence FD32 values also remain unchanged.

18. Automatic credit check

Automatic credit check is yet another type of credit check offered by with enhanced capabilities compared to simple credit check.

Define risk categories

Go for new entries (f5) and name various risk categories for your credit control area

One can now define credit groups if felt necessary

Next step is to assign credit groups to sales and del documents

You will be faced with the below given screen on executing the above shown step. Note that here we have options to do credit settings at all the three order, del and goods issue level (as shown below) as we are working on automatic credit check.

Now if we choose the first option, we will be faced with a screen (as shown below) wherein we can define settings at order level.

Go to position and search for ZOR

Now one has to select a value D for check credit column and value 01 for credit group column. This is because 01 corresponds to Order Level and D corresponds to Automatic credit check.

Now let us assign Credit Groups for Del and Goods Issue. Go to position and search for LF. Assign values for credit groups as shown below.

Note that A, B, C, D values are not given here in this screen because it is programmatically understood that as we are working at del and goods issue level, check credit value will be automatically D.

Now one has to do Settings for Automatic Credit Control. Go back and execute the relevant function as shown below

You will be faced with the below shown screen on execution.

Go for BARR entries and you will be faced with the below given screen

[Former Member]

Credit Management

The customer’s credit limit is assigned to the customer by going to the Logistics overview screen, Accounting, Financial accounting, Accounts receivable, Master records, Credit management, Change.

A credit control area is an organizational unit that is comprised of one or more company codes.

Create a credit control area and assign it to a company code in the Enterprise structure under financial accounting.

A customer’s risk category is a grouping category that controls the credit checks when automatic credit control takes place.

In SD credit check can occur in only three places: sales order, delivery and goods issue.

The system can use a simple credit check, static credit check or a dynamic credit check.

The simple credit check is set at the document type level e.g., sales order, delivery etc.

Simple Credit Check

Assign credit limit check to the sales doc type:

A – warning message

B – Error message

C – Delivery block

D – Automatic credit control

SAP enables static and dynamic credit checks so that a sales order for a good customer with a low risk credit rating is created and a sales order for a high risk customer with a high risk rating for the same doc type is blocked.

Automatic credit control divides the sales doc types, delivery doc types, and goods issue into specific credit groups.

An outcome procedure is defined using the credit group, the customer’s risk category along with the credit control area.

Risk categories are defined in the FI module.

Create the different credit groups e.g., for sales order, delivery, goods issue.

Assign the credit groups to the sales and delivery doc types.

Now define the settings for automatic credit control -> combination of credit control area, customer’s risk category, and credit group.

All that remains is the assignment of the risk category to the customer master record. This occurs in Finance by going to the Logistics overview screen -> Accounting, Financial Accounting, Accounts receivable, Master records, Credit management, Change or FD32.

The static credit check is a check comparing the credit limit assigned to the customer to the total value of open sales orders, plus the total value of open deliveries not yet invoiced, plus the total value of open billing documents not yet passed on to accounting, plus the total value of billing documents that have been passed on to accounting, but which have not been paid by the customer.

The dynamic credit check is a check comparing the credit limit assigned to the customer to the total value of open sales orders not yet delivered, plus the total value of open deliveries not yet invoiced, plus the total value of open billing documents not yet passed on to accounting, plus the total value of billing documents that have been passed on to accounting, but which have not been paid by the customer. The dynamic credit check has an attached time period that states that the system is not to include sales orders in the total of outstanding items created after the specified time period.

The credit relevant data is updated into an information structure, where it is accessed and updated. Thus each automatic credit control must be assigned an update group. The system allows for no update, and update group 000012, 000015 and 000018. However, update group 000012 is thorough and used in most businesses.

To view the customer’s credit master sheet, proceed from the logistics screen and go to accounting, financial accounting, accounts receivable, environment, credit management, check, credit master sheet [F.35].

Credit Management1

Settings for determining the credit control area of a document.

The settings of items 1 - 4 are taken into account according to their priority.

The credit control area found is stored in field VBAK-KKBER.

1. Transaction OB38

Check which credit control area is assigned to the company code.

Company code:

Credit control area:

2. Transaction OVFL

Check which credit control area is assigned to the sales area.

Sales area:

Credit control area:

3. Transaction XD02 or VD02

Check which credit control area is assigned to the payer.

Payer:

Credit control area:

4. Transaction SE37

Is user exit EXIT_SAPV45K_001 being used?

5. Transaction OBZK

For the settings under items 2 - 4, field "All company codes" must be marked in Transaction

OB45, or the credit control area must be entered under the relevant company code in table

T001CM of the credit control areas allowed.

Company code:

Credit control areas allowed:

6. Settings for the credit checks

7. Transaction OVAK

Which settings do exist for the sales document type used?

Sales document:

Check credit:

Credit group:

8. Transaction OVAD

Which settings do exist for the delivery type used?

Delivery type:

Credit group for delivery:

Credit group for goods issue:

9. Transaction OB01

Credit management/Change risk category

Definition of the risk category for each credit control area. This risk category can be

assigned to a credit account by using Transaction FD32.

10. Transaction OVA8

Here, the individual credit checks for key fields

o credit control area

o risk category

o credit group are set. Take these key fields from the above settings and go to the detail

screen. In particular, check whether fields "Reaction" and "Status/block" are set

correctly. To carry out follow-up actions in case of a credit block, the credit check

status must be set (field "Status/block").

11. Transaction FD32

Credit master data for the payer of the relevant document.

Credit account:

Credit limit:

Risk category:

Currency:

12. Settings for updating the credit values Update of the credit values is required for the limit

check (static or dynamic credit limit check).

13. Transaction OVA7

Update of the credit value is active for the corresponding item type if the check box is marked. This field corresponds to

field "Active receivable" in Transaction VOV7.

Item type:

Active receivable:

14. Transaction V/08, Pricing

In the pricing procedure used for pricing, subtotal "A" must be entered in a line for

determining the credit value (mark the pricing procedure and doubleclick on "Control").

Usually, the net value plus taxes is used. This way the system is determined to use this

subtotal for credit pricing. The credit price is stored in field VBAP-CMPRE and used for

update and credit check.

You can find the used pricing procedure of the order under "Item -> Condition -> Analysis".

Pricing procedure:

Line with subtotal = 'A':

15. Transaction OB45

Which update group (field "Update") do you use in the relevant credit control area? The

default setting is "12". If you use another update group, check whether this is fine with

you. If you open an OSS message, please tell us the alternative update group.

Credit control area:

Update:

16. Transaction OMO1

Which kind of update did you choose for structure S066?

In any case, "Synchronous update (1)" has to be chosen as the kind of update.

All other settings will lead to errors.

Regards,

Rajesh Banka

[former_member194164]

Hi Natasha,

please check your mailbox. i have sent you another mail with end to end credit management customization in just two to three pages notes.hope this will really help you out.

regards

vikas chhabra

[Former Member]

Hi natasha

CREDIT MANAGEMENT:

A credit limit may be a customer’s credit limit, which is the permitted limit of value of open items, such as invoices not yet paid, plus the value of open sales orders.

The credit limit is the total combined value of the following documents:

Net value of sales order

Open Sales order: order created, but not delivered

Open deliveries: delivered, but not invoiced

Open billing doc: value of billing doc, which has not yet been forwarded to accounting

Open items: forwarded to accounting, but not settled.

Types of Credit Check

• Simple Credit Check

• Automatic Credit Check

o Static

o Dynamic

Simple Credit Check:

SPRO- IMG- SD- Basic Functions- Credit Mgmt/ Risk Mgmt- Simple Credit Check- Assign Credit Check to Doc Types.

• Based on sales doc types

• It will check all the above-mentioned docs & if the credit limit exceeds, the system responds in the way defined by you in the configuration menu.

• Cannot differentiate according to customer

3 ways to Control the Simple Credit Check:

A: warning

B: error message: the doc cannot be saved

C: warning message with delivery block: the doc can be saved but is automatically blocked for delivery.

Automatic Credit Check:

This credit mgmt control is maintained by using the automatic credit control functionality. The automatic credit control divides the sales doc types, the delivery doc types, & goods issue into specific credit groups. It also uses the customer’s risk category as assigned to the CMD of the payer & assigns an outcome proc to the combination of the above 2 objects, i.e. the credit group & customer risk category along with the credit control area. The definition of customer’s risk category is carried out in the fin accounting module.

A customer’s risk category is a grouping category that controls the credit check when automatic credit control takes place. Thus one can assign high-risk customers to risk category for e.g. A01, medium risk to B01 and low risk to C01.

Automatic credit check divides customers in to 3 categories:

• High-risk customers,

• Low risk customers &

• Medium risk customers.

A credit check can only occur at 3 places: Credit Group

Sales order: for high risk customers

Delivery: for medium risk customers

Goods Issue: for low risk customers

Credit Control Area (CCA): highest organizational element in credit management. A credit control area is an organizational unit that is comprised of one or more company codes. A company code can have no more than one credit control area. Defined by FI.

Menu Path to create Credit Control Area: OB45: FI people.

SPRO- IMG- Enterprise Stru- Definition- Fin Accounting- Define Credit Control Area

Credit Control Area Description

0001 Credit control area 0001

1000 Credit control area Europe

Menu Path to Assign Company Code to Credit Control Area: OB38: FI people.

SPRO- IMG- Ent Stru- Assignment- Fin Accounting- Assign Comp Code to CCA

• It is possible to assign Credit Control Area to a Sales Area. This is more specific assignment than the assignment to Company Code.

Company code Company name City Credit Control Area Over write CCA

Menu Path for Defining Risk Categories: OB01: FI people

SPRO- IMG- Fin Accounting- Account Receivables & Payables- Credit Mgmt- Credit Control Account- Define Risk Categories.

Risk Category CCA Name

001 4500 Low risk

002 4500 Medium risk

003 4500 High risk

Menu Path for defining Credit Groups: OVA6

SPRO- IMG- SD- Basic Function- Credit Mgmt/ Risk Mgmt- Credit Mgmt:

• Define Credit Groups: OVA6

• Assign Credit Groups to Sales Doc’s & Delivery Doc’s

o Credit Limit check for Order Types: OVAK

o Credit Limit check for Delivery Types: OVAD

• Define Automatic Credit Control: OVA8

Define Credit Croups: OVA6

One merely creates a credit group for each differentiation in the doc type. You enter the credit groups when you configure the sales doc types for credit management & define the automatic credit check. The following credit groups are contained in the standard R/3 system:

• 01: credit group for sales order

• 02: credit group for delivery

• 03: credit group for goods issue

CG (Credit Group) Doc Credit Group

01 Credit group for sales order

02 Credit group for delivery

03 Credit group for goods issue

Assign Sales Documents & Delivery Documents:

Sales Doc Type Descp Check Credit Credit Group

OR Std Order D 01

Delivery Type Descp Del Credit Group GI Credit Group

LF Delivery 02 03

Define for each sales doc type whether a credit check should be carried out. Enter ‘D’ if an automatic credit check should be carried out.

Specify a Credit Group

Specify a Credit Group for the Delivery Type for which you want to carry out a credit check

Specify a Goods Issue Credit Group for the Delivery Type for which a credit check is to be carried out for goods issue.

SIMPLE CREDIT CHECK CANNOT BE ASSIGNED TO DOCUMENTS.

Define Automatic Credit Control:

One can now assign settings to the combination of the Credit Control Area, the Customer Risk Category & the Credit Group.

CCA Risk Cat Credit Group Credit Control

4500 001 01 Low risk sales orders

4500 001 02 Low risk deliveries

4500 001 03 Low risk goods issue

4500 002 01 Medium risk sales orders

4500 002 02 Medium risk deliveries

4500 002 03 Medium risk goods issue

4500 003 01 High risk sales orders

4500 003 02 High risk deliveries

4500 003 03 High risk goods issue

Select line item and go to details, you can decide whether to do Static or Dynamic Credit Check. Credit Horizon can also assigned here. Additional function checks can be performed here:

• A credit check when the maximum document value is exceeded.

• A credit check when changing critical fields.

The risk category assignment occurs in the same place as the customer’s credit limit, which is the customers credit management screen. That is, the risk category is assigned to the customer by the Finance in transaction code FD32.

The customer credit master record is divided in to 5 views:

• Overview Screen: gives an overview of credit settings in relation to the customer, including his credit limit, credit exposure, the %tage of credit limit used, his payment data & his risk category.

• Address: view gives the customers address details as they appear in CMD

• Central Data: is a view that shows the total credit limit the customer can receive across all credit control areas as well as the maximum limit he can receive in one credit control area.

• Status: view shows the customer’s actual individual details according to particular CCA being investigated. This includes his credit limit, percentage used, credit exposure, risk category, whether he is blocked due to credit or not.

• Payment history: view displays the payments made by the customer for a particular credit control area where a comp code is assigned.

Static Credit Check Dynamic Credit Check

Net Doc Value Net Doc Value

Open Order Open Order

Open Delivery Open Delivery

Open Billing Open Billing

Open Item Open Item

Compares the total combined values of the above-mentioned documents to credit limit. Plus credit horizon. Compares the values of the following documents to credit limit + credit horizon.

Credit horizon has an attached time period that states that the system is not to include sales orders in the total of outstanding items created after that specified period i.e. for the purpose of evaluating credit, you want the system to ignore all open orders that are due for delivery after the horizon date. Maintained for low & medium risk customers.

Update Groups

Basically it is a info structure where system stores all the data about credit limit. The credit relevant data is updated in a info structure, where it is accessed & updated. Thus each automatic credit control must be assigned an update group.

• Update Group 000012

• Update Group 000015: delivery & billing

• Update Group 000018: sales order, delivery & billing.

Update group 000012, updates at:

• Sales doc: increased order value

• Delivery: decreased order value & increased delivery value

• Billing: decreased delivery value & increased billing amount

• Invoice: decreased billing amount & increased open item value.

Release Blocked Sales Order/ Deliveries:

• VKM3: sales order

• VKM5: delivery

• VKM4: both

One can see the offending document. Note on the right hand side, the ‘Status Field’. This shows the check, the doc failed. If this field is empty, the doc did not fail a credit check, even though it may be in the list of SD documents that are “required to be released”.

To release the doc, one indicates the doc to be released and then clicks on the ‘Release Button’. The result is the offending doc entry, highlighted green. One then proceeds to save, after which you are informed the doc number has been released.

• Net value with sub total ‘A’, in pricing proc, will be the basis for credit limit.

IN

REWARD if helpfull

Thanks & Regards

Narayana

[Former Member]

Hi Natasha.,

Sent mail Please go through

REWARD if helpfull

Thanks & Regards

Narayana