configuration setting of automatic and simple credit check

[Former Member]

hello friends

wht is the configuration setting required for automatic and simple credit check

[Former Member]

Hi krishan

Credit and risk management takes place in the credit control area. According to your corporate requirements, you can implement credit management that is centralized, decentralized, or somewhere in between.

An organizational unit that represents the area where customer credit 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.

For example, if your credit management is centralized, you can define one credit control area for all of your company codes.

If, on the other hand, your credit policy requires decentralized credit management, you can define credit control areas for each company code or each group of company codes.

Credit limits and credit exposure are managed at both credit control area and customer level. You set up credit control areas and other data related to credit management in Customizing for Financial Accounting. The implementation guide is under Enterprise Structure -> Definition or Assignment -> Financial Accounting and then Maintain credit control area. You assign customers to specific credit control areas and specify the appropriate credit limits in the customer master record.

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.

REWARD IF U FINDS THIS AS HELPFUL...

[Former Member]

Hi

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)

[Former Member]

Hi Krishnan,

Let me throw some light on this .

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:

Credit control area

Risk class (classifying attribute for your customers from the viewpoint of credit risk which is maintained in FI Customizing)

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:

specify type of check

specify scope of check

specify system response to check

allocate credit control areas

define and allocate risk classes if necessary

allocate credit group

assign description to the credit check

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.

For example, you could deactivate the credit check for the following sets of circumstances:

As long as a document contains no items, no check will be carried out.

No check will be carried out during order creation, but rather 14 days before delivery using a background program.

A check should be made to see whether the payment guarantee form has changed (letter of credit, payment card). If the payment guarantee form has not changed and if the old net value does not exceed the new net value, then no credit check is carried out.

You can also reset the credit document status. The following example demonstrates when this is necessary:

You are working with risk management and have specified payment card as the payment guarantee form in the payment guarantee procedure. You create a sales order but do not enter a payment card and the credit check is carried out. You then change the sales order and enter a credit card. Since the credit card is a secure means of payment usually for an unlimited amount, you do not want to carry out another check. You can now use a requirement to have the system bypass all checks and reset the 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.

Caution:

Make sure that the coding in your routines is consistent with the coding in risk management and the import and export parameters for the example routines supplied with the standard system.

Check financial accounting/old A/R summary

In distributed systems (central financial accounting, decentral sales and distribution), the FI data from the central system is needed for the credit check (see also: Release note Credit management in distributed systems). At the payer level or credit account level, for example, the following data would be needed for a check: Total of open items, detail information on open items (i.e. oldest open item), maximum dunning level, etc. Using the A/R summary, the FI data in the central system can be collected and then transmitted to the decentral SD system using the distribution function. The data is then evaluated in the SD system. The A/R summary represents compressed FI information for the credit check.

In check financial accounting/ old A/R summary, you can specify the allowed change rate for the A/R summary using allowed days and allowed hours. This is where you define how old the A/R summary can be for a check to be carried out. If the age rate for the A/R summary is exceeded during a credit check, the document is blocked.

Tip:

If you have set up credit management so that credit checks are only carried out for certain, comparatively rare orders, then you can enter an age rate of 0. You should also activate RFC in FI Customizing for credit management (preparatory configurations). This ensures that the A/R summary is always determined if a credit check is to be carried out. Because credit checks are carried out relatively rarely in this case, system performance will not be significantly influenced.

Note:

Fields allowed days and allowed hours are only available for entry if you have entered an X in field Read A/R summary in FI Customizing. The path is:Accounts Receivable and Accounts > Credit Management > Credit Control Account > Make basic settings for credit management.

Actions

1. Enter a combination of credit control area, risk class and credit group as well as a description for the credit check you want to define.

2. On the detail screen of credit control, specify the type of checks required (for example, static, dynamic), the scope of the check as well as the system response according to your requirements.

3. If necessary, enter the general data for the credit check.

Award points if it adds information.

Thanks

Mohan