Difference between Simple & Dynamic, Static Credit Checks??

[Former Member]

Hi,

Can any body explain the diff between the Simple Credit check & Dynamic, Static Credit Checks??

[Former Member]

SIMPLE CREDIT CHECK : Tr.Code - FD32

It Considers the Doc.Value + Open Items.

Doc.Value : Sales Order Has been saved but not delivered

Open Item : Sales Order has been saved , Delivered, Billed & Transferred to FI, but not received the payment from the customer.

Eg: Customer Credit Limit is Rs.1,00,000/-

Suppose Doc.Value + Open Item Value is Rs.1,10,000/-

Here credit limit exceeds then system reacts.

Options : A) Warning Message

B) Error Message (Sales Order won't be saved)

C) Error Message with Delivery Block

AUTOMATIC CREDIT CHECK : Give extra credit facilities to the particular customer.

STATIC CREDIT LIMIT DETERMINATION :Checking Group + Risk Category + Credit Control Area.

A) Credit Checking Groups : Types of Checking Groups.

01) Sales

02) Deliveries

03) Goods Issue

At all the above 3 levels orders can be blocked.

B) Risk Category : Based on the risk categories company decide how much credit has to give to the customer.

HIGH RISK (0001) : LOW CREDIT

LOW RISK (0002) : MORE CREDIT

MEDIUM RISK(0003) : Average Credit

Static Credit Check it checks all these doc value & check with the credit limit

1) Open Doc.Value / Sales Order Value : Which is save but not delivered

2) Open Delivery Doc.Value : Which is delivered but not billed

3) Open Billing Doc.Value : Which is billed but not posted to FI

4) Open Item : Which is transferred to FI but not received from the customer.

DYNAMIC CREDIT CHECK : 1) Open Doc

2) Open Delivery

3) Open Billing

4) Open Items

5) Horizon Period = Eg.3Months

Here the System will not consider the above 1,2,3& 4 values for the lost 3 months

Then assign the Sales Doc & Del Documents.

Sales Doc.Type(OR) + credit Check(0) + Credit Group (01)

Credit Limit Check for Delivery Type : Del.Type (LF) + Del Credit

Group (02) + Goods Issue Credit Group (03)

[Former Member]

Hi Damodar Reddy,

Below esplanation provides some basic understanding on Static & Dynamic Credit Checks:

Static credit check

Static credit check uses the value of confirmed quantities, regardless of delivery date. It also uses the open receivable balance and special general ledger accounts relevant for credit. You can also include open orders (regardless of delivery date) and open deliveries. Open deliveries include all quantities in deliveries as well as quantities in SD billing documents not yet passed to Accounts Receivable. The value is determined by multiplying the confirmed quantity by the credit price.

2) Dynamic credit check

Dynamic credit check in the order uses the value of confirmed quantities scheduled to ship within the credit window. The quantities are updated from schedule lines of existing orders and the order being entered. If the quantity confirmed is zero, the value of the current order (for credit limit check purposes) is zero. The value is determined by multiplying the confirmed quantity by the credit price.

Note that open order values are only updated from schedule lines that are relevant for delivery (TVEP-LFREL = ‘X’). Third party order items, for example, do not update open orders since they do not create deliveries (there is no mechanism to decrease the open order values other than by creating a delivery).

The length of the credit window in days is determined by multiplying the increment in Table T681F by 7 (weeks) or 30 (month or accounting period). The result is then added to today’s date.

Also go thr below links fo more info 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

Reward Poinst if it helps

Regards

Srini

[Former Member]

Hi,

In sap we have two types of credit checks 1) Simple credit check 2) Automatic credit check again Automatic credit checkis divided into two types a) Static credit check b) Dynamic credit check

In Simple credit check system checks what is the customer total credit that will be maintained in FD32 and what is the outstanding balance and what is the order value eg: customer X is having 20000 cr limit but his outstanding bal is 18000/-

so when this X customer placing the order n the value of order is 3000/- system can't process the order the drawback of this type of credit check is for all customers it will consider the same while checking the credit.

Regards

Karthik.R

[Former Member]

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)

The open order value is the value of the order items which have not yet been delivered. The open delivery value is the value of the delivery items which have not

yet been invoiced. The open invoice value is the value of the billing document items which have not yet been forwarded to accounting. The open items represent documents that have been forwarded to accounting but not yet settled by the customer.

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. The value is calculated on the shipping date and stored in an information structure according to a time period that you specify (days, weeks, or months). When you define the credit check, you can then specify a particular horizon date in the future (for example: 10 days or 2 months, depending on the periods you specify). For the purposes of evaluating credit, you want the system to ignore all open orders that are due for delivery after the horizon date. The sum of the static and dynamic parts of the check may not exceed the credit limit.

Main diference is time horzion

[Former Member]

Hi

Simple credit limit check is Total present document value + All open order value + All open delivery value + all billing document value which is posted to accounting+ all billing document value which is posted to accounting but not paid by the customer..

Static Credit limit check is system checks the credit limit of payer for open sales order value + open delivery value + open billing document value + billing document which posted to accounting but not paid by the customer..

Where as Dynamic credit limit check is system checks the credit limit of payer open sales order value + open delivery value + open billing document value + billing document which posted to accounting but not paid by the customer for a Specific time period . this is called as TIME HORIZON..example one week, 15days, one month, 2 month etc

hope this is clear for you

Reward Points if it is help ful

Regards

MBS

[Former Member]

There are 2 types of Credit checks:

Simple CC

Automatic CC.

Simple CC i mentioned in the previous thread, In Automatic CC it takes open orders, open deliveries, open receivable and open items, to compare customer payer credit limit.

In automatic CC, different types of checks are available. Ex.: Static, Dynamic, document value etc.

Simple CC is done at Sales Order Only.

Automatic CC is done at Sales order level, delivery and PGI level.

Static CC: System carries out credit check by getting credit exposure by comparing total value of open sales documents, open delivery documents, open billing documents and open items.

Dynamic CC:It indicates system carries out Dynamic CC within specified credit horizon. System gets credit exposure by splitting static Part (Open items, open billing and open delivery values) and dynamic part i.e. Open order value.

Regards

AK

Reward points if helpful