credit mngt

[Former Member]

Hello SAP Gurus,

1.What is risk category.

2.What is credit group?

3.What is automatic credit control?

4.What is the diff between Simple credit check and automatic credit check?

[Former Member · Accepted solution]

<b>Risk Category </b>:In order to classify customers according to the risk they represent

and to trigger the relevant checks, you can assign a risk category to a customer. This risk category determines which checks the system should carry out when processing orders in Sales and Distribution.

<b>credit group</b>

<b>Allows you to combine different sales document types for the credit limit check

Automatic Credit Controls in SD</b>

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

Difference Between Simple and Automatic Credit Check Types

Explain in detail difference between simple and automatic credit check types. In automatic check, difference between static and dynamic checks.

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 & Transfered 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 Catageory + 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 Catageory : Based on the risk catageories 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 delievered

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 transfered 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)

delivery is created or when goods are issued. You specify data for automated credit control in

Customizing for Sales and Distribution. For detailed information about how to enter this data, see

the SD Implementation Guide.

[Former Member]

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.

[Former Member]

Hi Rajesh,

I will start with explaining difference between Simple credit check and automatic credit check.

Simple credit check happens only at sales document level. Irrespective of the customer, system will check the customer's credit limit with open orders, deliveries and items and if he exceeds the limit we can control whether to process the order for him or not.

But in real business scenario, there may some good customers, who may exceed their limit, just because of this, we can't stop processing orders for them. Automatic credit control ensures performing credit check based on the customers.

For this purpose we define customers into different risk categories. These are freely definable, general categories can be low risk, medium risk and high risk customers.

Now once we categorised customers based on their payment history or whatever the parameters, we can perform the credit check at different places like in the sales order, in the delivery and at the time of PGI. This we configured as Credit Groups.

So, with Automatic credit control, we can perform the credit check at three different levels based on the customer risk categories. For example a High risk customer exceeds his limit we can stop him at sales order level. A medium risk customer exceeds his limit, we may process his order, but block delivery. If a low risk customer iexceeds his limit we can process sales order and delivery but can have a check at PGI.

This will give a facility to perform the credit check based on the Customer risk categories and at various levels.

Hope this will help you.

Regards,

Ravikiran Pochiraju

[Former Member]

hi,

risk category :

it is a way of classifying customers, according to companies credit polocies ex: high ,low,medium risk etc

2. credit group :

on which level u want to effect the credit check

1.order level

2.delivery level

3.PGI level

3.automatic credit control:

there are 2 types of credit checks available

1.simple credit control

2.automatic credit control

4.simple credit check :

it compares payer credit limit to the net document value and value of open items runs credit check.

automatic credit control :

it is a more specialised credit check which can be configured depending upon the customers offering various credit check.

such as taking open orders,open deliveries etc for some customers u want to check the oldest open items etc

simple credit check treats all the customer as thesame way depending upon the credit limit set for them.

regards

sriram.

[Former Member]

1.credit manager to classify customers according to commercial risk. Along with the document type, the risk category helps to determine which kind of credit check the system automatically carries out. For example, you may want to carry out stringent checks at order receipt for high risk customers, but waive a credit check for customers with a very strong payment history.

2.credit manager can freely define groups of customers according to your needs. For example, you can define groups of customers by industry sector, by country, or by any characteristic that will help you focus your credit management. Credit representatives can use these groups to help select credit holds for processing and to generate reports for statistical analysis.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 groupYou 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.

3.

[Former Member]

Hi,

Risk Category:

In order to classify customers according to the risk they represent

and to trigger the relevant checks, you can assign a risk category

to a customer. This risk category determines which checks the

system should carry out when processing orders in Sales and

Distribution.

Customer Credit Group:

You can define groups of customers in accordance with your

company’s needs. Customers can for example be grouped by

industry, country, or other criteria that help you carry out Credit

Management more specifically. The credit representative can use

these groups to select blocked documents for processing and to

generate reports for statistical analysis.

Automatic Credit control:

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.

regards

Ali

[Former Member]

Hi rajesh

give u r email id

I will send detail document

krishna

[Former Member]

Hi Rajesh,

1. Risk Category = Risk category is used to assign that the customer is a Low risk / Medium Risk / High Risk customer. Whenever you maintaint the credit limit of the customer using FD32 T-code the Risk category can be maintained. Using the Risk category + Credit control area + Credit Group option you define the Automatic credit control options.

2. Credit Groups= The credit group groups together different business transactions which should be dealt with in the same manner with regard to the credit check.

You enter the credit groups when you configure the sales document types

for credit management and define the automatic credit check.

Default settings -

The following credit groups are contained in the standard SAP R/3

System:

o 01 = credit group for sales order

o 02 = credit group for delivery

o 03 = credit group for goods issue

3. Automatic Credit control = The automatic credit check can target certain aspects during a check and

run at different times during order processing. In this menu option, you

can define your own credit checks to correspond to your requirements in

the area of Credit Management.

You can determine an automatic credit check for any combination of the

following:

o Credit control area

o Risk class (classifying attribute for your customers from the

viewpoint of credit risk which is maintained in FI Customizing)

o Credit group

Example

You can define a credit check for a certain credit control area and

for all sales orders in which the customer has risk class 2 (RK2).

It is possible to define a system response for each credit check (for

example, warning message). In the case of a warning message, a block can

be set in the credit status of a document.

When you define automatic credit checks, you can also freely define

requirements which cause a document or the forwarding of the material

requirements to MRP to be blocked. This is described in the IMG section

"Make default settings for Credit Management".

If you define your own credit checks, proceed as follows:

o specify type of check

o specify scope of check

o specify system response to check

o allocate credit control areas

o define and allocate risk classes if necessary

o allocate credit group

o assign description to the credit check

4. In simple credit check we do not have option of having a static or Dynamic Credit check. Also the Automatic credit control area gives the option to have our own settings based on Open items / Sales Doc value / Horizon etc.. For more details please refer the T-code - OVA8.

Hope the above helps you.

REWARD if it helps you!!

Regards,

Ajinkya

[Former Member]

Hi

1.What is risk category.

The credit risk category which controls all credit checks

2.What is credit group?

credit group is used to combine different document types for the purposes of credit management.

3.What is automatic credit control?

The SAP System automatically proposes the defined sales document types for maintaining the credit limit check

4.What is the diff between Simple credit check and automatic credit check?

Automatic credit check:

Credit check will calculated for all financial period.

Simple Credit Check:

It is for Specific period.

Reward if it helps

Regards

Prasanna R