Creditworthiness

[priyank_choudhary]

Hi,

Our business users have an alphbetical system for credit rating. SAP - ISU provides a numerical creditworthiness rating structure. Also SAP creditworthiness is based on 48 months data. Can we base the Creditworthiness to only one year and also reduce the maximum creditworthiness from 9999 to say 100 or 1000.

I tried to find some material on credotworthiness but not much in SAP help.

Also request you to provide me if some material is available on SAP IS-U creditworthiness.

Thanks in advance.

Priyank

[Former Member]

Hi Prikay,

Bellow there are some details about CreditWorthiness I compiled from diferent sources:

Hope it will be helpfull.

The question for you is in which process do you want to use the creditworthiness and what are the process details?

Creditworthiness

Use

The creditworthiness of a business partner provides information on the business partner’s payment history and influences the selection of activities for dunning and/or returns and also the calculation of charges. Various different business transactions, such as returns, dunning notices, and write-offs update the creditworthiness in the system automatically. You can also transfer a creditworthiness record from external systems or manually.

The current status of a business partner’s creditworthiness is determined as a weighted total on the basis of the creditworthiness figures recorded over the last 48 months. You define the monthly weightings in Customizing. A creditworthiness of zero means that the business partner has a very good payment history. The maximum value is 9999.

The level of creditworthiness depends on:

· Initialization in Customizing

· The creditworthiness factor in percent

· Manual creditworthiness

· Number of dunning notices, returns, and write-offs

The creditworthiness figure is adjusted if a dunning notice or return is reversed.

Prerequisites

Time-dependent weighting

To determine the weighted total you have to make a time-dependent creditworthiness weighting in Customizing (see IMG structure Contract Accounts Receivable and Payable ® Business Transactions ® Dunning and/or Returns ®Define Time-Dependent Creditworthiness Weightings).

Dunning

If you want to use creditworthiness determination, enter the dunning activities and/or dunning charges in conjunction with a creditworthiness figure. The dunning activity run reads the current creditworthiness of a business partner and selects the dunning activity and dunning charge where the creditworthiness determined is greater or the same as the creditworthiness value defined in Customizing.

You can define a creditworthiness weighting in the dunning levels of dunning procedures. Once dunning has taken place, the creditworthiness figure of the current month is increased by this number.

You can define the creditworthiness figure in Customizing in each dunning procedure and dunning level (see IMG structure Contract Accounts Receivable and Payable ® Business Transactions ® Dunning Notices ® Configure Dunning Procedure and Configure Charge Schedules for Dunning Procedure).

Returns

If you want to use creditworthiness determination, enter the returns activities in conjunction with a creditworthiness figure. During returns processing, the system automatically determines the creditworthiness of a business partner, and, depending on this creditworthiness, the system selects the returns activity where the creditworthiness value determined is greater or the same as the value defined in Customizing.

You can define a creditworthiness weighting in the returns reasons. Once returns processing has taken place, the creditworthiness figure of the current month is increased by this figure.

You can define the creditworthiness weighting with the returns reason in Customizing (see IMG for Contract Accounts Receivable and Payable ® Business Transactions ® Returns ® Configure Returns Reasons).

Write-Offs

Write-offs can also have a negative effect on a customer's creditworthiness. If you want to use creditworthiness determination, enter the write-offs in conjunction with a creditworthiness figure.

You can define the creditworthiness weighting with the write-off reasons in Customizing (see IMG for Contract Accounts Receivable and Payable ® Business Transactions ® Write-Offs ® Configure Write-Off Reasons).

Features

The system automatically determines the creditworthiness of a business partner in returns processing and in a dunning run. The creditworthiness influences the activities and the charges levied, provided that you have defined the activities and charges dependent on creditworthiness in Customizing.

There is a display and change function for creditworthiness. The features are as follows:

· You can display the automatically determined creditworthiness of every business partner in a creditworthiness history. Using the creditworthiness history you can see an overview of when the creditworthiness of a business partner changed (SAP menu: Account ® More Information ®Creditworthiness).

· You can enter or change the creditworthiness manually. The manual creditworthiness is added to the value of the automatically determined creditworthiness, and thus forms the overall creditworthiness of a customer.

· You can enter a percentage creditworthiness factor for each business partner. You use this factor to weight the creditworthiness depending on the business partner.

· You can fix the current value of the automatically determined creditworthiness. The creditworthiness value can then only change for reasons relating to creditworthiness, such as dunning or dunning notice reversal, but not for time-dependent reasons.

· You can release this fixed value manually, so that the creditworthiness can change for time-dependent reasons.

· You can enter or reverse a creditworthiness record manually or with a BAPI in the creditworthiness history. The system then determines the new creditworthiness automatically.

· For the creditworthiness of a business partner, SAP delivers the object type CA_CRDRTNG and the BAPIs contained therein.

Change documents record any entries or changes that you have made to the manual creditworthiness, as well as changes to the percentage creditworthiness factor.

If there is no data record for the current calendar year when you call the Change Creditworthiness function, the system automatically creates an initial record. The initial record contains the current calendar year. All other values in the creditworthiness records are blank.

Activities

To display or change the creditworthiness of a business partner, choose one of the following paths:

· Roles

Business Partner Account Information(SAP_FI_CA_PARTNER_ACCOUNT_INFO) ® Display Business Partner Creditworthiness or Change Business Partner Creditworthiness.

· SAP Menu

Master Data ® Business Partner ® Display/Change Creditworthiness

FI-CA events related to creditworthiness

400 Determine Creditworthiness of Business Partner

401 Creditworthiness: Create Creditworthiness Entry

402 Creditworthiness: Reverse Creditworthiness Entry

1842 Mass Activity: SAP Credit Management, Score Replication

1843 Mass Activity: Score Replication, SAP Credit Mgt Parameters

R030 Determine Creditworthiness Limit

ISU_EVENT_NEW_R401

FKK_SAMPLE_0360

Other function modules:

Where Used List of DFKKCRP

FKK_CANCEL_CREDIT_RATING_ENTRY

FKK_DB_DFKKCRP_BY_HERKF

FKK_DB_DFKKCRP_FOR_GPART

FKK_DB_DFKKCRP_SELECT

FKK_DETERMINE_CREDIT_RATING

FKK_FREEZE_CREDIT_RATING

FKK_RELEASE_CREDIT_RATING

FKK_SAMPLE_0401 Example 0401: Write a Creditworthiness Entry

FKK_SAMPLE_0402 Example 0402: Cancel a Creditworthiness Entry

FKK_WRITE_CREDIT_RATING_ENTRY EXTERNAL: Writes an Entry for Creditworthiness Record

ISU_SAMPLE_R425

Where Used List of DFKKCRH

FKK_CALCULATE_CREDIT_RATING

FKK_CANCEL_CREDIT_RATING_ENTRY

FKK_CRDRT_WRITE_DOCUMENT CHDO FKK_CRDRT => Gen. by RSSCD000

FKK_CREATE_DUNNING_DATA

FKK_DB_DFKKCRH_FOR_GPART

FKK_DB_DFKKCRH_SELECT

FKK_DB_DFKKCRH_UPDATE

FKK_DB_DFKKCRP_FOR_GPART

FKK_DETERMINE_CREDIT_RATING

FKK_FREEZE_CREDIT_RATING

FKK_READ_CREDITWORTH_FOR_BP

FKK_RELEASE_CREDIT_RATING

FKK_SAMPLE_0400 FI-CA: Assess Business Partner's Creditworthiness

FKK_SAMPLE_0401 Example 0401: Write a Creditworthiness Entry

FKK_SAMPLE_0402 Example 0402: Cancel a Creditworthiness Entry

FKK_WRITE_CREDIT_RATING_ENTRY EXTERNAL: Writes an Entry for Creditworthiness Record

MAP2E_DFKKCRH_TO_BAPIDFKKCRH

Calculating Customer Creditworthiness

Requirements/Expectations/Assumptions

The creditworthiness of a business partner provides information on the business partner’s payment history and influences the selection of activities for dunning and/or returns and also the calculation of charges.

The creditworthiness is updated in the system automatically by various different business transactions returns, dunning notices, and write-offs. Creditworthiness can also be updated manually.

The current status of a business partner’s creditworthiness is determined as a weighted total on the basis of the creditworthiness figures recorded over the last 12 months. You define the monthly weightings in Customizing.

A creditworthiness of zero means that the business partner has a very good payment history. The maximum value is 9999.

The level of creditworthiness depends on:

· Initialization in Customizing

· The creditworthiness factor in percent

· Manual creditworthiness

· Number of dunning notices, returns, and write -offs

The creditworthiness figure is adjusted if a dunning notice or return is reversed.

Assumptions:

The utility will use the SAP creditworthiness functionality to track the payment patterns of business partners rather than a third party system.

General explanations

Creditworthiness is defined at the business partner level and changes in the creditworthiness rating will be determined in dunning, returns and write-off activity. The business partner’s payment patterns are reflected in the creditworthiness value. These values are determined by the utility using individual criteria of their own choosing. The range selected for the system is:

0 – 10 Excellent

11 – 50 Moderate

51 and above poor

The ISU Processes that can automatically update creditworthiness:

1. Dunning

Dunning will be coded in configuration to increase a business partner’s creditworthiness value as a result of dunning activity. Credit worthiness will also be used by dunning to exclude business partners from certain dunning activities. The dunning activity run reads the current creditworthiness of a business partner and selects the dunning activity and dunning charge where the creditworthiness determined is greater or the same as the creditworthiness value defined.

A creditworthiness weighting can be defined to be used in conjunction with the creditworthiness values in the dunning levels of dunning procedures. Once dunning has taken place, the creditworthiness figure of the current month is increased by this weighted number.

2. Returns

Return activities will be coded in configuration to increase a business partner’s creditworthiness value as a result of return transaction.

You can define a creditworthiness weighting in the returns reasons. Once returns processing has taken place, the creditworthiness figure for the current month is increased by the value associated with the return multiplied by the weighting.

3. Write-offs

Write-offs will also effect on a customer's creditworthiness. A business partner’s creditworthiness value will be increased by the value associated with the write-off transaction. This derived value becomes part of the customer’s current calculated creditworthiness value.

You can define the creditworthiness weighting with the write-off reasons in Customizing (see IMG structure Contract Accounts Receivable and Payable ® Business Transactions ® Write-Offs ® Configure Write-Off Reasons).

Explanations:

The system automatically determines the creditworthiness of a business partner. The three transactions used to determine the creditworthiness value are returns, dunning, and write-off. Often dunning and returns are combined as both of these processes can be accomplished in one dunning run. The creditworthiness influences the activities and the charges levied in the various levels of dunning and in the return reason codes for return transactions.

There is a display and change function for creditworthiness. The features are as follows:

The creditworthiness of every business partner can be viewed in the creditworthiness history.

SAP Easy Access menu: Utility Industry → Contract Accounts Receivable and Payable → Account → Further Information → Creditworthiness (Transaction FPCR1)

Credit worthiness can also be entered manually into the system. The manual creditworthiness is added to the value of the automatically determined creditworthiness, and thus forms the overall creditworthiness of a customer.

Explanation of functions and events

1. A business partner ’s creditworthiness is determined by transactions associated with dunning, returns, and write-off

2. Each of these transactions is assigned a value to be added to a business partner’s creditworthiness if the partner has items involved in these transactions.

3. A business partner’s current credit worthiness value can be used to determine the charges or deposit refund dates.

4. The business partner’s creditworthiness history can be viewed.

5. Creditworthiness is a rolling value which allows a customer to improve his score if his payment pattern changes.

6. A manual creditworthiness can be used by entering a percentage-based weighting and creditworthiness data manually.

[Former Member]

it's a very helpful information for me...thanks a lot  ...

[Former Member]

Hi,

Some more info I was having...please check if useful.

http://help.sap.com/saphelp_utilities472/helpdata/en/e6/297540540ed362e10000000a155106/Release_Infos...

Regds

Sachin

[Former Member]

hi kulakarni ,

for updating creditworthiness by business partner level we need to specify any extra area except like return, dunning, and write off level.

the above places i found link for updating creditworthiness area is there any exceptional area to update this process.

Regards ..

Sam

[Former Member]

Hi Sam,

As per my knowledge the areas you mentioned are the correct, need to check if any specific parameter still remains out of discussion.

One point which i would just like to highlight is- in scenarios where third parties are involved e.g maintenace activity/Bill collection/ Grid owner/ tax collector, these also should be considered for creditworthiness if the Business partner is having business transactions with these third parties which are indirectly connected to the utility Industry.

Regards

Sachin

[former_member301082]

This message was moderated.

[former_member301082]

Hi Experts

Is there an option to update/adjust the creditworthiness number in a -ve value.

Regards

Kunal

[ivor_martin]

Hi,

You cannot assign a negative value.

However, you can reverse Credit Worthiness entries via an FI-CA Event.

Read the documentation of Event 403 via TCODE FQEVENTS.

Other Events allow you to manipulate the standard SAP Credit Worthiness calculation:

Event 400 (custom Credit Worthiness calculation using your Customers business rules)

Event 401 (Create an new Credit Worthiness entry)

In addition, there are BAPIs to create, CANCEL change and get Credit Worthiness scores.

They are:

BAPI_CTRACCCREDITRATING_CANCEL

BAPT_CTRACCCREDITRATING_CREATE

BAPI_CTRACCCREDITRATING_GET

Therefore if you wish to add/cancel or manipulate Creditworthiness based on non-standard Tcodes or programs, you may do so using one or more of thee above BAPIS or Events.

I hope this helps.

Regards,

Ivor