Credit Mgmt

Credit ManagementCredit Management

Sales & DistributionSales & Distribution


• Credit Management enables you to minimize the Credit Management enables you to minimize the credit risk yourself by specifying a specific credit credit risk yourself by specifying a specific credit limit for your customers.limit for your customers.

• You can take the financial pulse of a customer or You can take the financial pulse of a customer or group of customers, identify early warning signs, group of customers, identify early warning signs, and enhance your credit-related decision-making. and enhance your credit-related decision-making.

• Credit control area is basic organizational unit Credit control area is basic organizational unit that represents the area where customer credit that represents the area where customer credit is awarded and monitored.is awarded and monitored.



• DecentralizedDecentralized


• Credit limit check in OrderCredit limit check in Order

CREDIT CONTROL BASICSCREDIT CONTROL BASICS

• There are only three places where a credit check can occur- the sales There are only three places where a credit check can occur- the sales order, delivery and at goods issue.order, delivery and at goods issue.

• Documents blocked for credit by selecting Logistics—SD—Credit Mgmt—Documents blocked for credit by selecting Logistics—SD—Credit Mgmt—SD Documents—All ( T code VKM3).SD Documents—All ( T code VKM3).

Once the document is released, you can continue processing it Once the document is released, you can continue processing it even though the credit limit check failed.even though the credit limit check failed.

• You can use program RVKRED08 to recheck all documents blocked for You can use program RVKRED08 to recheck all documents blocked for credit. For example, if a customer pays his account, you want to recheck credit. For example, if a customer pays his account, you want to recheck all his documents. Some documents can now be released because of the all his documents. Some documents can now be released because of the payment received. It is a good idea to schedule a background job using payment received. It is a good idea to schedule a background job using this program so that blocked documents are checked on regular basis. this program so that blocked documents are checked on regular basis. This will keep the blocked documents up to date with any changes to the This will keep the blocked documents up to date with any changes to the account or to sales documents, such as a payment being made. If a large account or to sales documents, such as a payment being made. If a large sales order that was holding up the credit limit is cancelled, other blocked sales order that was holding up the credit limit is cancelled, other blocked documents can use the value that is freed up by the cancellation.documents can use the value that is freed up by the cancellation.


• Transactions used in Credit Management:-Transactions used in Credit Management:- Sales Transactions: Sales Transactions:VKM4 -All documents for releaseVKM4 -All documents for releaseVKM3 -Sales document documents for releaseVKM3 -Sales document documents for releaseVKM5 -Delivery documents for releaseVKM5 -Delivery documents for releaseVKM2 -ReleasedVKM2 -Released Finance transactions: Finance transactions:FD10N - Customer balance displayFD10N - Customer balance displayFBL5N - Customer line item displayFBL5N - Customer line item displayF-28 - Reset customers credit limitF-28 - Reset customers credit limitF.31 - Overview: customer's financial analysis or line items.F.31 - Overview: customer's financial analysis or line items.F.33 - Brief overviewF.33 - Brief overviewF.32 - Missing credit dataF.32 - Missing credit dataFCV3 - Early warning listFCV3 - Early warning listFDK43 - Master data list.FDK43 - Master data list.S_ALR_87012215 - Displays changes to credit management.S_ALR_87012215 - Displays changes to credit management.S_ALR_87012218 - Credit master sheetS_ALR_87012218 - Credit master sheet


• Credit OverviewCredit Overview is used for reporting credit is used for reporting credit limit and exposure for various customers in limit and exposure for various customers in CCA. T. code – F.31CCA. T. code – F.31

CONFIGURATION- 1CONFIGURATION- 1

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

• Settings for determining the credit control area of a document. The Settings for determining the credit control area of a document. The settings of items 1 - 4 are taken into account according to their priority. settings of items 1 - 4 are taken into account according to their priority. The credit control area found is stored in field VBAK-KKBER.The credit control area found is stored in field VBAK-KKBER.1. Transaction OB381. Transaction OB38

• Check which credit control area is assigned to the company code.Check which credit control area is assigned to the company code.• Company code:Company code:• Credit control area:Credit control area:

2. Transaction OVFL2. Transaction OVFL• Check which credit control area is assigned to the sales area.Check which credit control area is assigned to the sales area.• Sales area:Sales area:• Credit control area:Credit control area:


3. Transaction XD02 or VD023. Transaction XD02 or VD02• Check which credit control area is assigned to the payer.Check which credit control area is assigned to the payer.• Payer:Payer:• Credit control area:Credit control area:

4. Transaction SE374. Transaction SE37• Is user exit EXIT_SAPV45K_001 being used?Is user exit EXIT_SAPV45K_001 being used?

5. Transaction OBZK5. Transaction OBZK• For the settings under items 2 - 4, field "All company codes" For the settings under items 2 - 4, field "All company codes"

must be marked in Transactionmust be marked in Transaction• OB45, or the credit control area must be entered under the OB45, or the credit control area must be entered under the

relevant company code in tablerelevant company code in table• T001CM of the credit control areas allowed.T001CM of the credit control areas allowed.• Company code:Company code:• Credit control areas allowed:Credit control areas allowed:

6. Settings for the credit checks6. Settings for the credit checks

CONFIGURATION- 3CONFIGURATION- 37. Transaction OVAK7. Transaction OVAK

• Which settings do exist for the sales document type used?Which settings do exist for the sales document type used?• Sales document:Sales document:• Check credit:Check credit:• Credit group:Credit group:

8. Transaction OVAD8. Transaction OVAD• Which settings do exist for the delivery type used?Which settings do exist for the delivery type used?• Delivery type:Delivery type:• Credit group for delivery:Credit group for delivery:• Credit group for goods issue:Credit group for goods issue:

9. Transaction OB019. Transaction OB01• Credit management/Change risk categoryCredit management/Change risk category• Definition of the risk category for each credit control area. This risk category can beDefinition of the risk category for each credit control area. This risk category can be• assigned to a credit account by using Transaction FD32.assigned to a credit account by using Transaction FD32.

10. Transaction OVA810. Transaction OVA8• Here, the individual credit checks for key fieldsHere, the individual credit checks for key fields• o credit control areao credit control area• o risk categoryo risk category• o credit group are set. Take these key fields from the above settings and go to the o credit group are set. Take these key fields from the above settings and go to the

detaildetail• screen. In particular, check whether fields "Reaction" and "Status/block" are setscreen. 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 checkcorrectly. To carry out follow-up actions in case of a credit block, the credit check• status must be set (field "Status/block").status must be set (field "Status/block").

CONFIGURATION- 4CONFIGURATION- 411. Transaction FD3211. Transaction FD32• Credit master data for the payer of the relevant document.Credit master data for the payer of the relevant document.• Credit account:Credit account:• Credit limit:Credit limit:• Risk category:Risk category:• Currency:Currency:12. Settings for updating the credit values Update of the credit values is required for the limit12. Settings for updating the credit values Update of the credit values is required for the limit• check (static or dynamic credit limit check).check (static or dynamic credit limit check).13. Transaction OVA713. Transaction OVA7• Update of the credit value is active for the corresponding item type if the check box is Update of the credit value is active for the corresponding item type if the check box is

marked. This field corresponds to marked. This field corresponds to • field "Active receivable" in Transaction VOV7.field "Active receivable" in Transaction VOV7.• Item type: Item type: • Active receivable:Active receivable:14. Transaction V/08, Pricing14. Transaction V/08, Pricing• In the pricing procedure used for pricing, subtotal "A" must be entered in a line forIn 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").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 thisUsually, 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 forsubtotal for credit pricing. The credit price is stored in field VBAP-CMPRE and used for• update and credit check.update and credit check.• You can find the used pricing procedure of the order under "Item -> Condition -> Analysis".You can find the used pricing procedure of the order under "Item -> Condition -> Analysis".• Pricing procedure:Pricing procedure:• Line with subtotal = 'A':Line with subtotal = 'A':


15. Transaction OB4515. Transaction OB45• Which update group (field "Update") do you use in the Which update group (field "Update") do you use in the

relevant credit control area? Therelevant credit control area? The• default setting is "12". If you use another update group, default setting is "12". If you use another update group,

check whether this is fine withcheck whether this is fine with• you. If you open an OSS message, please tell us the you. If you open an OSS message, please tell us the

alternative update group.alternative update group.• Credit control area:Credit control area:• Update:Update:16. Transaction OMO116. Transaction OMO1• Which kind of update did you choose for structure S066? Which kind of update did you choose for structure S066? • In any case, "Synchronous update (1)" has to be chosen In any case, "Synchronous update (1)" has to be chosen

as the kind of update. as the kind of update. • All other settings will lead to errors. All other settings will lead to errors.


• Customizing for Credit ControlCustomizing for Credit Control

• Define Credit Control AreaDefine Credit Control Area

• SPRO > Enterprise Structure > Definition > Financial Accounting > Define SPRO > Enterprise Structure > Definition > Financial Accounting > Define Credit Control Area Credit Control Area


• Assigning Company Codes to a Credit Control AreaAssigning Company Codes to a Credit Control Area SPRO > Enterprise Structure > Assignment > Financial Accounting > SPRO > Enterprise Structure > Assignment > Financial Accounting > Assign Company Code to Credit Control Area Assign Company Code to Credit Control Area


• Assigning Sales Area to a Credit Control AreaAssigning Sales Area to a Credit Control Area SPRO > Enterprise Structure > Assignment > Sales and Distribution > SPRO > Enterprise Structure > Assignment > Sales and Distribution >

Assign Sales Area to Credit Control AreaAssign Sales Area to Credit Control Area

Types of credit checkTypes of credit check

• The system can use many different automatic The system can use many different automatic credit management checks such as:credit management checks such as:- A static check- A static check- A dynamic check- A dynamic check- A check on the total document value- A check on the total document value- A critical field check- A critical field check- A next review date check- A next review date check- A check on open items- A check on open items- A check on oldest open item- A check on oldest open item- A check on highest permitted dunning level- A check on highest permitted dunning level

Simple credit checkSimple credit check• The simple credit check compares the payer customer The simple credit check compares the payer customer

master record's credit limit to the net document value plus master record's credit limit to the net document value plus the value of all open items.the value of all open items. In case the value of the document and open items is more In case the value of the document and open items is more than the credit limit:than the credit limit:- System may respond with a warning message in the - System may respond with a warning message in the sales order [OR]sales order [OR]- Warning message and a delivery block [OR]- Warning message and a delivery block [OR]- Error message, which will cause the document not to - Error message, which will cause the document not to be saved.be saved. This setting for a simple credit check is set at the This setting for a simple credit check is set at the document type level:document type level: SPRO > Sales and Distribution > Basic Functions > Credit SPRO > Sales and Distribution > Basic Functions > Credit Management/Risk Management > Simple Credit Limit Management/Risk Management > Simple Credit Limit CheckCheck We can assign the credit limit check to the sales document We can assign the credit limit check to the sales document type, using the options:type, using the options:A - Run simple credit limit check and warning messageA - Run simple credit limit check and warning messageB - Run simple credit limit check and error messageB - Run simple credit limit check and error messageC - Run simple credit limit check and delivery blockC - Run simple credit limit check and delivery block

Automatic credit management-1Automatic credit management-1

• It is used to carry out the different credit checks including the static and It is used to carry out the different credit checks including the static and dynamic checks. For this, we separate the sales document types, the dynamic checks. For this, we separate the sales document types, the delivery document types, and goods issue into specific credit groups.delivery document types, and goods issue into specific credit groups. Defining Customer Risk Category (FI) Defining Customer Risk Category (FI) SPRO > Financial Accounting > Accounts Receivable and Accounts SPRO > Financial Accounting > Accounts Receivable and Accounts Payable > Credit Management > Credit Control Account > Define Risk Payable > Credit Management > Credit Control Account > Define Risk Categories Categories

• Example: If we have 5 risk categories and 2 document credit groups, we Example: If we have 5 risk categories and 2 document credit groups, we have 10 credit management strategies to configure.have 10 credit management strategies to configure.


• Defining Credit GroupsDefining Credit Groups SPRO > Sales and Distribution > Basic Functions > Credit Management/Risk SPRO > Sales and Distribution > Basic Functions > Credit Management/Risk Management > Credit Management > Define Credit GroupsManagement > Credit Management > Define Credit Groups

•

• We need to assign a value in the pricing procedure that defines the We need to assign a value in the pricing procedure that defines the amount used for credit check. For this, subtotal A must be entered in amount used for credit check. For this, subtotal A must be entered in the control data of Pricing Procedure. The credit price is stored in field the control data of Pricing Procedure. The credit price is stored in field VBAP-CMPRE and is used for the update and the credit check.VBAP-CMPRE and is used for the update and the credit check.


• Assigning Sales Documents and Delivery DocumentsAssigning Sales Documents and Delivery Documents SPRO > Sales and Distribution > Basic Functions > Credit SPRO > Sales and Distribution > Basic Functions > Credit Management/Risk Management > Credit Management > Assign Sales Management/Risk Management > Credit Management > Assign Sales Documents and Delivery Documents > Credit Limit Check for Order Types Documents and Delivery Documents > Credit Limit Check for Order Types > Credit Limit Check for Delivery Types > Credit Limit Check for Delivery Types



• Defining Automatic Credit ControlDefining Automatic Credit Control The control of the automatic credit management is based on the The control of the automatic credit management is based on the combination of the risk category and the document credit group.combination of the risk category and the document credit group. SPRO > Sales and Distribution > Basic Functions > Credit SPRO > Sales and Distribution > Basic Functions > Credit Management/Risk Management > Credit Management > Define Automatic Management/Risk Management > Credit Management > Define Automatic Credit ControlCredit Control

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• Static Credit Limit Check:Static Credit Limit Check: CREDIT LIMIT = Open Sales Orders + CREDIT LIMIT = Open Sales Orders +Open Deliveries (Not Yet Invoiced) +Open Deliveries (Not Yet Invoiced) +Open Billing Documents (Not Yet Passed On To Accounting) +Open Billing Documents (Not Yet Passed On To Accounting) +Billing Documents (Passed On To Accounting, But not yet paid by the customer)Billing Documents (Passed On To Accounting, But not yet paid by the customer) Dynamic Credit Check: Dynamic Credit Check: CREDIT LIMIT = Open Sales Orders Not Yet Delivered + CREDIT LIMIT = Open Sales Orders Not Yet Delivered +Open Deliveries (Not Yet Invoiced) +Open Deliveries (Not Yet Invoiced) +Open Billing Documents (Not Yet Passed On To Accounting) +Open Billing Documents (Not Yet Passed On To Accounting) +Billing Documents (Passed On To Accounting, But Not Yet Paid By The Customer)Billing Documents (Passed On To Accounting, But Not Yet Paid By The Customer) In addition to this, the dynamic check has attached time period (called the CREDIT In addition to this, the dynamic check has attached time period (called the CREDIT HORIZON).HORIZON).This controls that the system excludes the sales orders in the total of outstanding This controls that the system excludes the sales orders in the total of outstanding items that are due for delivery outside the credit horizon.items that are due for delivery outside the credit horizon. We may also require additional checks to be performed: We may also require additional checks to be performed:1. Credit check when the maximum document value is exceeded1. Credit check when the maximum document value is exceeded2. Credit check when changing critical fields2. Credit check when changing critical fields3. Credit check at the time of the next internal check3. Credit check at the time of the next internal check4. Credit check on the basis of overdue open items4. Credit check on the basis of overdue open items5. Credit check on the basis of oldest open items5. Credit check on the basis of oldest open items6. Credit check against the maximum allowed dunning levels6. Credit check against the maximum allowed dunning levels7. Customer specific credit checks7. Customer specific credit checks



• Each automatic credit control must be assigned an update group. This is done Each automatic credit control must be assigned an update group. This is done while defining Credit Control Area. We can have the following Update groups:while defining Credit Control Area. We can have the following Update groups: Update group 000012 Update group 000012Sales Order, Increases open order value from delivery-relevant schedule linesSales Order, Increases open order value from delivery-relevant schedule linesDelivery, Reduces open order value from delivery-relevant schedule lines, Delivery, Reduces open order value from delivery-relevant schedule lines, Increases open delivery valueIncreases open delivery valueBilling Document, Reduces open delivery value, Increases open billing document Billing Document, Reduces open delivery value, Increases open billing document value,value,Financial Accounting Document, Reduces open billing document value, Increases Financial Accounting Document, Reduces open billing document value, Increases open itemsopen items Update group 000015 Update group 000015Delivery,Increases open delivery value, Increases open billing document valueDelivery,Increases open delivery value, Increases open billing document valueFinancial Accounting Document, Reduces open billing document value, Increases Financial Accounting Document, Reduces open billing document value, Increases open itemsopen items Update group 000018 Update group 000018Sales Order, Increases open delivery valueSales Order, Increases open delivery valueBilling Document, Reduces open delivery value, Increases open billing document Billing Document, Reduces open delivery value, Increases open billing document valuevalueFinancial Accounting Document, Reduces open billing document value, Increases Financial Accounting Document, Reduces open billing document value, Increases open itemsopen items



• Customer Credit ManagementCustomer Credit Management Maintaining credit limit for a customer. Maintaining credit limit for a customer.SAP Menu > Accounting > Financial Accounting > Customers > Credit SAP Menu > Accounting > Financial Accounting > Customers > Credit Management > Master Data > ChangeManagement > Master Data > ChangeFD32FD32