vCentric - Hyderabad

SAP SD

CREDIT MANAGEMENT
CREDIT MANAGEMENT

S.No Item
1 2 Scenario Examples

Description
In most of the industries customers are allowed to make the payment within some time from the date of delivery [supply of goods]. 1. An automobile manufacturer, say Bajaj Auto Ltd., may invoice the dealer after supplying the material and allow him some time for the payment. 2. HLL may want not want to entertain any orders if the customer has not any cleared the earlier invoices. SAPs Credit Management solution enables among other things, maintenance of set Credit Limits per customer as well the maintenance of the system responses should a customers credit limit be exceeded. Assignment Customers are assigned Credit limits in a separate Transaction by specifying credit control areas T Code FD32 Logistics Accounting Financial Accounting Accounts Receivables Credit Management Master Data Change Logistics SD Credit Management Master Data Change 1. Group of credit personnel, generally consisting of a credit manager and a number of representatives. 2. Customers can be allocated to this group which may be processing credit holds. Credit manager can freely define groups of customers according to needs. Ex: Customers by industry sector, by country, or by any other characteristic. New customers can be subjected automatically to credit control, by assigning Credit Limit and Risk Category to credit control area. Path

Remarks
This is applicable up to a value of material supplied.

Credit Management

Credit Limit

Assigning Credit Limits and f system responses if Customers Credit limit exceeds Initial Screen : Enter Customer No, CCA and Status and press Enter Button. Overview Screen : Enter Credit Limit, and other data, Click on Save Button.

Credit Representative Group Customer Credit Group New Customers

This group may be copied into the order. This group may be copied into the order. System Responses can also be set for new Customers

Credit Management

Basic Information

vCentric - Hyderabad
8 Releasing Blocked Documents VKM3 Sales Documents VKM5 Sales Documents VKM4 All Documents VKM2 released Documents

SAP SD

CREDIT CONTROL AREA [CCA]

S.No Item
1 Definition

Description
An organizational unit that represents the area where customer credit is awarded and monitored. Credit and risk management takes place in the Credit Control Area. Area. According to corporate requirements, we can implement credit management that is centralized, decentralized, or somewhere in between. If the credit control area includes company codes with different local currencies to that of the credit control area, the system converts the receivables into the currency of the credit control area. The credit control area is determined in the following sequence: User exit Distribution channel Customer master Company code for the sales organization Enterprise structure Definition Financial Accounting Credit Control Area. Area.

Remarks
Relationship between CCA and Company Code One to Many Central One CCA for all CCs. Decentralised One CCA for each or group of CCs. _

Implementation

Currency

CCA Determination Path

S.No 01 02 03

TYPES OF CREDIT LIMIT CHECKS Type Comparison of Credit Limit with Simple Credit Limit Check Document Value + Open Items Static Credit Limit Check [Automatic Credit. Control] Dynamic Credit Limit Check [Automatic Credit Control] Document Value + Open Sales Orders + Open Deliveries + Open Billing Documents + Open Items

Document Value + Open Sales Orders [Horizon Period] + Open Deliveries + Open Billing Documents + Open Items Note : In Pricing Proc. the Total Val. considered for Cr. Ch is assigned A in Subtotal field.

Credit Management

Basic Information

vCentric - Hyderabad

SAP SD

SIMPLE CREDIT LIMIT CHECK

S.No Item 1 Simple Credit Limit Check

Description Remarks System compares the Credit Limit of the Credit Limit >=< Customer with the total of Net Order Value Net Sales Order Value and + Open Items. Based on the Open Items check system can be set to respond in different ways.
IMG SD Basic Functions Credit Management/Risk Management Simple Credit Limit Check Select the Sales document type and assign A, B or C to the document type. Based on the above configuration the system has the following responses should the customer be exceeding his credit limit. A - Run simple credit limit check and Warning Message B - Run simple credit limit check and Error Message. C - Run simple credit limit check and Block Delivery 1. All the customers are treated alike. 2. System compares credit limit with only Open Items along with Doc. Val. 3. System accepts any number of orders if the value of the orders small enough to process the order. T-Code : OVAK

Path for Configuration Configuration System Responses

3 4

A, B and C are system responses. Credit Group is not applicable for Simple Credit Limit Check.

Limitations

AUTOMATIC CREDIT CONTROL

S.No Item
1 Risk Category [3 digit AlphaNumeric Key] Definition Path Examples

Description Risk Category is the grouping of Customers based on their background, payment history etc.

IMG Financial Accounting Accounts Receivables and Payables Credit Management Credit Control Account Define Risk Categories Risk Category CCA Name 001 1000 Low Risk 002 1000 Medium Risk 003 1000 High Risk

Credit Management

Basic Information

vCentric - Hyderabad
Usage Assignment to Customer

SAP SD Used in Automatic Credit Control

Logistics Accounting Financial Accounting Accounts Receivables Master Records Credit Management Change

Definition Path for defining Credit Group Examples 2 Credit Group [2 digit AlphaNumeric Key] Path for assigning Credit Groups

Credit Group is the grouping of Document types for credit control purposes. That is Order Types OR
and RO can be grouped as one. IMG SD Basic Functions Credit Management/Risk Management Credit Management Define Credit Groups Credit Group Document Credit Group 01 Credit Group for Sales Order 02 Credit Group for Delivery 03 Credit Group for Goods Issue IMG SD Basic Functions Credit Management/Risk Management Credit Management Assign Sales Documents and Delivery Documents Document Type QT OR CS RO G2 Check Credit D D Credit Group 01 01 -

Example

03

Automatic Credit Control

Usage Definition

Checks

Criteria for Automatic Credit Check

Path for defining an Outcome procedure

Used in Automatic Credit Control In an Automatic credit control checks can be carried out at various places in the order cycle and is also based on customers credit rating. Checks are carried out at three places : Sales Order Delivery Goods Issue An outcome procedure is assigned for Automatic credit control based on the following 3 combinations : Credit Control Area Customers Risk Category Document Credit Group IMG SD Basic Functions Credit Management/Risk Management Credit Management Define Automatic Credit Control

Credit Management

Basic Information

vCentric - Hyderabad
CCAr Risk Examples of Outcome Procedure CG Credit Control

SAP SD

Types

System Responses

1000 001 01 Low Risk Sales Orders 1000 001 02 Low Risk Deliveries 1000 001 03 Low Risk Goods Issue 1000 002 01 Medium Risk Sales Orders 1000 003 01 High Risk Sales Orders 0001 001 01 Low Risk Sales Orders Static Credit Limit Check Dynamic Credit Limit Check Maximum Document Value Changes Made to Critical Fields Date of Next Review Overdue Open Items Oldest Open Item Maximum Number of Dunning Levels Allowed User-Defined Checks We can define for each checking rule whether the system reacts with an error or a warning etc. The following are the system responses. No Message A - Warning B - Error Message C - Like A + Value by which value of Credit limit had been exceeded. D - Like B + Value by which value of Credit limit had been exceeded. Number of a subroutine (= form routine), that checks a requirement at a specific time. Indicates that the system carries out credit checks not only when you save the document but already when you enter single items or header data.

No Check Item Check

Credit Management

Basic Information

vCentric - Hyderabad

SAP SD

Credit Management

Basic Information