CREDIT MANAGEMENT

CONFIGURATION
THE CUSTOMIZATION AT A HIGH LEVEL INVOLVES THE FOLLOWING STEPS: -

1. DEFINING A CREDIT CONTROL AREA

2. ASSIGN THE CREDIT CONTROL AREA TO COMPANY CODE AND SALES AREA
3. ASSIGN THE PERMITTED CREDIT CONTROL AREA FOR A COMPANY CODE (OPT)
4. DEFINE CREDIT RISK CATEGORIES
5. DEFINE CREDIT GROUPS
6. ASSIGN CREDIT GROUPS TO SALES DOCUMENTS AND DELIVERY DOCUMENTS
7. DETERMINING ACTIVE RECEIVABLES PER ITEM CATEGORY
8. SETTING UP CREDIT CHECKS

THE FOLLOWING SECTIONS COVER THESE CUSTOMIZATION STEPS IN DETAIL.

1. DEFINE CREDIT CONTROL AREA: -

SPRO-IMG-ENTERPRISE STRUCTURE-DEFINITION-FINANCIAL ACCOUNTING-DEFINE CREDIT CONTROL
AREA-EXECUTE-FOLLOW STEPS

S1

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 S2
HERE FOLLOW THE ABOVE PROCESS TO CREATE A CREDIT CONTROL AREA AS SHOWN IN S1 TO S2, A
CREDIT CONTROL AREA IS AN ORGANIZATIONAL UNIT WHICH IS RESPONSIBLE FOR MONITORING----
EVALUATING, AND CONTROLLING THE CREDIT MANAGEMENT OPERATIONS.

THE FIELDS IN SCREEN S1 ARE AS FOLLOWS: -

 CREDIT CONTROL AREA: - IT CONTAINS THE NAME OF CREDIT CONTROL AREA & DESCRIPTION

 CURRENCY: - HERE U CAN MAINTAIN THE CURRENCY FOR THE CREDIT CONTROL AREA. CREDIT
LIMITS ARE MAINTAINED IN THE CREDIT CONTROL AREA CURRENCY & IN SCENARIOS WHERE--
THE CURRENCY OF THE ASSIGNED COMPANY CODE IS DIFFERENT FROM THE CREDIT CONTROL
AREA CURRENCY, AND THEN CREDIT EXPOSURE OF THE CUSTOMERS UNDER SUCH COMPANY-
CODE IS CONVERTED INTO CREDIT CONTROL AREAS CURRENCY FOR THE PURPOSE OF CREDIT--
CHECKS RELATED DECISION MAKING.

 UPDATE RULES: - IN SAP CREDIT EXPOSURE IS A SUM OF OPEN RECEIVABLES, OPEN ORDERS---
OPEN DELIVERIES, AND OPEN BILLINGS. UPDATE RULES CONTROL WHEN AND HOW THE DATA
RELATED TO OPEN ORDERS, OPEN DELIVERIES, OPEN BILLING, & OPEN A/R IS UPDATED IN THE
CALCULATION OF CREDIT EXPOSURE. WE CAN CHOOSE ANY ONE OF THE FOLLOWING UPDATE
RULE IN SCREEN S1.

1. [BLANK]: -IF THE FIELD IS LEFT BLANK, THE SAP CREDIT MANAGEMENT APPLICATION IGNORES
THE SD DOCUMENTS & CONSIDERS ONLY OPEN RECEIVABLES & OPEN SPECIAL G/L ITEMS FOR
CALCULATING CREDIT EXPOSURE.

2. 000012: -IN THE EVENT THAT A NEW ORDER IS CREATED, THE OPEN ORDER VALUES IS ADDED-
TO THE EXPOSURE. WHEN THE ORDER IS DELIVERED, THE OPEN ORDER VALUE IS SUBTRACTED
FROM THE EXPOSURE, & THE OPEN DELIVERY VALUE IS ADDED TO THE EXPOSURE. ON BILLING
THE DELIVERY, THE OPEN DELIVERY VALUE IS SUBTRACTED FROM THE EXPOSURE, & THE OPEN
BILLING VALUE IS ADDED TO THE EXPOSURE. WHEN THE BILLING POSTS TO ACCOUNTING, THE
OPEN BILLING VALUE IS SUBTRACTED, AND THE OPEN A/R VALUE IS ADDED TO THE EXPOSURE
AND EXPOSURE IS FINALLY REDUCED WHEN THE CASH IS APPLIED AGAINST THE OPEN A/R.

3. 000015: - IN THIS RULE SAP TO CALCULATE THE EXPOSURE WITHOUT CONSIDERING THE OPEN
SALES ORDER VALUE. WHEN THE ORDER IS DELIVERED, THE OPEN DELIVERY VALUE IS ADDED--
TO EXPOSURE. ON BILLING GENERATION, THE OPEN DELIVERY VALUE IS SUBTRACTED FROM---
THE EXPOSURE, AND THE OPEN BILLING VALUE IS ADDED TO THE EXPOSURE. WHEN BILLING---
POSTS TO ACCOUNTING, THE OPEN BILLING VALUE IS SUBTRACTED,& THE OPEN A/R VALUE IS-
ADDED TO THE EXPOSURE. THE EXPOSURE IS FINALLY REDUCED WHEN THE CASH IS APPLIED---
AGAINST THE OPEN A/R.

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 4. 000018: - THIS IS USED FOR NON DELIVERY-RELEVANT ORDERS ONLY. WHEN A NEW ORDER IS
CREATED, THE OPEN DELIVERY VALUE IS ADD TO THE EXPOSURE. WHEN THE ORDER IS BILLED,
THE OPEN DELIVERY VALUE IS SUBTRACTED FROM THE EXPOSURE, AND THE OPEN BILLING IS
ADDED TO THE EXPOSURE. WHEN THE BILLING IS POSTS TO ACCOUNTING, THE OPEN BILLING
VALUE IS SUBTRACTED, & THE OPEN A/R VALUE IS ADDED TO THE EXPOSURE. THE EXPOSURE
IS FINALLY REDUCED WHEN THE CASH IS APPLIED AGAINST THE OPEN A/R.

 FY VARIANT: -IN SAP, THE FISCAL OR FINANCIAL YEAR OF AN ORGANIZATION IS DIVIDED INTO
A NUMBER OF PERIODS (A POSTING PERIOD AND SPECIAL PERIODS). FISCAL YEAR VARIANT IS
THE TERM USED TO REPRESENT AND CONTROL THESE POSTING PERIOD. WHEN A DOCUMENT
IS POSTED INTO ACCOUNTING, A FISCAL YEAR VARIANT HELPS TO DETERMINE THE POSTING--
PERIOD AND FISCAL YEAR FOR POSTING THE ACCOUNTING ENTRY INTO THE CORRECT PERIOD
YOU SHOULD ENTER HERE A FISCAL YEAR VARIANT FOR YOUR CREDIT CONTROL AREA IF THE--
FISCAL YEAR VARIANT ARE DIFFERNET IN COMPANY CODE & CREDIT CONTROL AREA.IF THEY--
ALL USE THE SAME FISCAL YEAR VARIANT, YOU CAN LEAVE THIS FIELD BLANK. THE REASON IS-
IN SAP THE CREDIT VALUES ARE UPDATED IN THE TABLES (S066) ARE RECORDED PER POSTING
PERIOD. IN CASES THE ASSIGNED COMPANY CODES HAVE A DIFFERENT FISCAL YEAR VARIANT,
DETERMINING THE CORRECT POSTING PERIOD BECOMES DIFFICULT. THE POSTING PERIOD IN--
SUCH SCENARIO CAN BE DETERMINED ONLY IF YOU ASSIGN A DEFAULT FISCAL YEAR VARIANT
TO YOUR CREDIT CONTROL AREA.

 DEFAULT DATA FOR AUTOMATICALLY CREATING NEW CUSTOMERS: - HERE PROVIDE DEFAULT
VALUES IN THESE FIELDS IF YOU WANT TO PERFORM CREDIT CHECKS ON ORDERS FROM NEW
CUSTOMERS WHO HAVE NOT YET BEEN GRANTED CREDIT TERMS.

 ALL CO. CODES: SELECT THIS BOX IF YOU WANT TO APPLY YOUR CREDIT CONTROL AREA TO----
ALL THE COMPANY CODES THAT EXIST IN YOUR SAP INSTANCE.

2. ASSIGN COMPANY CODE TO CREDIT CONTROL AREA: -

SPRO-IMG-ENTERPRISE STRUCTURE-ASSIGNMENT-FINANCIAL ACCOUNTING-ASSIGN COMPANY CODE
TO CREDIT CONTROL AREA-EXECUTE-FOLLOW STEPS

S3

S4

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 S5
HERE FOLLOW THE ABOVE PROCESS TO ASSIGN THE CREDIT CONTROL AREA TO COMPANY CODE AS----
SHOWN IN S3 TO S5, A CREDIT CONTROL AREA CAN BE ASSIGNED TO MULTIPLE COMPANY CODE, BUT-
A COMPANY CODE CAN BE ASSIGNED TO ONLY ONE CREDIT CONTROL AREA. IF YOU WANT TO HAVE---
THE FLEXIBILITY TO OVERWRITE THE DEFAULT CREDIT CONTROL AREA DURING DOCUMENT POSTING--
YOU NEED TO SELECT THE OVERWRITE CC CHECK BOX FOR THE PARTICULAR COMPANY CODE

3. ASSIGN SALES AREA TO CREDIT CONTROL AREA: -

SPRO-IMG-ENTERPRISE STRUCTURE-ASSIGNMENT-S&D-ASSIGN SALES AREA TO CREDIT CONTROL----
AREA-EXECUTE-FOLLOW STEPS

S6

S7

S8
HERE FOLLOW ABOVE PROCESS TO ASSIGN THE SALES AREA TO CREDIT CONTROL AREA AS SHOWN IN
S6 TO S8

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3. ASSIGN PERMITTED CREDIT CONTROL AREA TO COMPANY CODE: -
SPRO-IMG-FINANCIAL ACCOUNTING-A/R & A/P-CREDIT MANAGEMENT-CREDIT CONTROL ACCOUNT-
ASSIGN PERMITTED CREDIT CONTROL AREA TO CPMANY CODE-EXECUTE-FOLLOW STEPS

S9

S10

S11
HERE FOLLOW THE ABOVE PROCESS TO ASSIGN PERMITTED CREDIT CONTROL AREA TO THE COMPANY
CODE AS SHOWN IN S9 TO S11, IN SAP A CREDIT CONTROL AREA CAN BE ASSIGNED TO A NUMBER OF-
COMPANY CODE BUT A COMPANY CODE CAN HAVE ONLY ONE DEFAULT CREDIT CONTROL AREA. BUT-
IN SOME SITUATION THE BUSINESS REQUIREMENT DEMANDS AN ALTERNATE CREDIT CONTROL AREA-
INSTEAD OF USING THE DEFAULT CREDIT CONTROL AREA ASSIGNED TO THE COMPANY CODE IN OB38,
SO WE CAN CREATE ALTERNATE CREDIT CONTROL AREA & ASSIGN THEM TO COMPANY CODE IN THIS-
STEP 3 & THE OVERWRITE CHECK BOX MUST BE ON IN DEFAULT CREDIT CONTROL AREA, SO THAT WE-
CAN REPLACE THE PROPOSED CREDIT CONTROL AREA WITH ALTERNATE CREDIT CONTROL AREA

4. DEFINE RISK CATEGORIES: -

SPRO-IMG-FINANCIAL ACCOUNTING-A/R & A/P-CREDIT MANAGEMENT-CREDIT CONTROL ACCOUNT-
DEFINE RISK CATEGORIES-EXECUTE-FOLLOW STEPS

S12

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 S13

S14
HERE FOLLOW ABOVE PROCESS TO CREATE RISK CATEGORIES AS SHOWN IN S12 - S14 TO CATEGORISE
THE CUSTOMERS ACCORDING TO THEIR CREDIT RATING FOR CREDIT CALCULATION

5. DEFINE CREDIT GROUPS: -

SPRO-IMG-S&D-BASIC FUNCTION-CREDIT/RISK MANAGEMENT-CREDIT MANAGEMENT-DEFINE CREDIT
GROUPS-EXECUTE-FOLLOW STEPS

S15

S16

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HERE FOLLOW THE ABOVE PROCESS TO CREATE CREDIT GROUPS AS SHOWN IN S15 TO S16, A CREDIT--
GROUP REPRESENT THE BUSINESSS TRANSACTION AT WHICH CREDIT CHECK WILL BE APPLIED

6. ASSIGN CREDIT GROUP TO SALES AND DELIVERY DOCUMENTS: -

SPRO-IMG-S&D-BASIC FUNCTION-CREDIT/RISK MANAGEMENT-CREDIT MANAGEMENT-ASSIGN CREDIT
GROUP TO SALES AND DELIVERY DOCUMENTS-EXECUTE-FOLLOW STEPS

S17

S18

S19
HERE FOLLOW THE ABVE PROCESS TO ASSIGN THE CREDIT GROUP TO SALES DOC TYPE AS SHOWN IN
S17-S19 & INCASE OF SIMPLE CREDIT CHECK NO NEED TO ASSIGN CREDIT GROUP TO SALES DOC TYPE.

S20

S21

S22

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 S23

S24
HERE FOLLOW THE ABOVE PROCESS TO ASSIGN THE CREDIT GROUP TO DELIVERY TYPE & PGI WHICH---
WILL CHECK CREDIT LIMIT DURING DELIVERY & PGI AS SHOWN IN S21-S24

7. DETERMINING ACTIVE RECEIVABLES PER ITEM CATEGORY: -

SPRO-IMG-S&D-BASIC FUNCTION-CREDIT/RISK MANAGEMENT-CREDIT/RISK MANAGEMENT SETTINGS
-DETERMINING ACTIVE RECEIVABLES PER ITEM CATEGORY-EXECUTE-FOLLOW STEPS

S25

` S26

S27

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 S28
HERE FOLLOWTHE ABOVE PROCESS TO ACTIVE CREDIT CHECK PER ITEM CATEGORY AS SHOWN IN S27-
S28, THIS SETTING HELPS TO CALCULATE THE NET ORDER VALUE THAT IS RELEVANTS FOR THE CREDIT-
CHECK. SO, IN THE CASE OF AN ORDER WITH FOUR LINE ITEMS OF INR 100 EACH, IF THREE LINE ITEMS-
ARE SET UP AS RELEVANT TO A CREDIT CHECK AS PER ITEM CATEGORY, SAP CONSIDERS ONLY INR 300-
AS NET CREDIT VALUE FOR CALCULATING THE CREDIT EXPOSURE FOR THAT SALES ORDER & EXCLUDES
INR 100 FOR LINE 4, WHICH IS NOT RELEVANT FOR CREDIT CHECK

NOTE: - (CREDIT CHECK IS ALWAYS CARRIED OUT FOR PAYER PARTNER AFTER ACCUMULATING OPEN
ORDER, DELIVERY, BILLING, WHEN AN ORDER IS CREATED SYSTEM CHECKS THE TOTAL ORDER VALUE
AND ADD IT TO THE CREDIT EXPOSURE THEN IT CHECK WITH THE CREDIT LIMIT IN CREDIT MASTER)

8. SETTING UP CREDIT CHECK: -

SAP PROVIDES TWO TYPES OF CREDIT CHECK NAMELY: -
(1)SIMPLE CREDIT CHECK
(2)AUTOMATIC CREDIT CHECK

(1) SIMPLE CREDIT CHECK: - A SIMPLE CREDIT CHECK IS SIMPLE IN NATURE AS IT CHECKS THE CURRENT
ORDER VALUE+VALUE OF OPEN ITEM <> CREDIT LIMIT MAINTAINED IN CUSTOMER CREDIT MASTER. IF
THE CREDIT EXPOSURE IS GREATER THAN THE CREDIT LIMIT THEN SYSTEM GIVES SOME MESSAGE

SETTING UP SIMPLE CREDIT CHECK: -

SPRO-IMG-S&D-BASIC FUNCTIOS-CREDIT MANAGEMENT/RISK MANAGEMENT-SIMPLE CREDIT LIMIT
CHECK-EXECUTE-FOLLOW STEPS

S29

S30

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 S31

S32
HERE FOLLOW THE ABOVE PROCESS TO SET THE SIMPLE CREDIT CHECK AS SHOWN IN S29 TO S32, IN---
ABOVE SETTING CHOOSE ‘A/B/C’ FOR SIMPLE CREDIT CHECK AND IN SIMPLE CREDIT CHECK THERE IS---
NO NEED TO ASSIGN CREDIT GROUP

(2)AUTOMATIC CREDIT CHECK: -AUTOMATIC CREDIT CHECK IS MORE ROBUST THAN A SIMPLE CREDIT-
CHECK. UNLIKE A SIMPLE CREDIT CHECK WHERE U APPLY A STANDARD RULE ACROSS ALL THE CREDIT-
CHECK RELEVANT DOCUMENTS, BUT AN AUTOMATIC CREDIT CHECK ALLOWS YOU TO PICK & CHOOSE
FROM A VARIETY OF CREDIT CHECK RULES AVAILABLE IN THE STANDARD SAP SYSTEM ACCORDING TO
YOUR CREDIT CHECKS ON.

TYPES OF AUTOMATIC CREDIT CHECK: -

(A) STATIC
(B) DYNAMIC
(C) DOCUMENT VALUE
(D) CRITICAL FIELDS
(E) CUSTOM DEFINED

SETTING UP AUTOMATIC CREDIT CHECK: - (ASSIGN SALES AND DELIVERY DOCUMENTS)

SPRO-IMG-S&D-BASIC FUNCTIONS-CREDIT AND RISK MANAGEMENT-CREDIT MANAGEMENT-ASSIGN
SALES DOCUMENTS & DELIVERY DOCUMENTS-EXECUTE-FOLLOW STEPS

S33

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 S34

S35
HERE FOLLOW THE ABVE PROCESS TO ASSIGN THE CREDIT CHECK AS ‘D’ & CREDIT GROUP TO SALES
DOC TYPE AS SHOWN IN S33-S35

S36

S37

S38

S39

S40

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HERE FOLLOW THE ABOVE PROCESS TO ASSIGN THE CREDIT GROUP TO DELIVERY AND PGI AS SHOWN
IN S37 TO S40

SETTING UP AUTOMATIC CREDIT CHECK: - (DEFINE AUTOMATIC CREDIT CONTROL)

SPRO-IMG-S&D-BASIC FUNCTIONS-CREDIT AND RISK MANAGEMENT-CREDIT MANAGEMENT-DEFINE
AUTOMATIC CREDIT CONTROL-EXECUTE-FOLLOW STEPS

S41

S42

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 S43
HERE FOLLOW THE ABOVE PROCESS TO SETUP DIFFERENT TYPE OF AUTOMATIC CREDIT CHECK AS PER
CREDIT CONTROL AREA+RISK CATEGORY+CREDIT GROUP COMBINATION AS SHOWN IN S41-S43

MEANING OF FIELDS AVAILABLE IN AUTOMATIC CREDIT CONTROL SCREEN ARE AS FOLLOWS: -

(1) NO CREDIT CHECK: - HERE YOU CAN SET UP YOUR OWN REQUIREMENT TO NOT TRIGGER CREDIT
CHECKS ON CERTAIN DOCUMENTS OR IN A CERTAIN SITUATION.

(2) ITEM CHECK: - IF YOU SELECT THIS CHECK BOX SAP CONSIDER THE ITEM CATEGORY RELEVANT FOR
CREDIT CHECK. THE CREDIT CHECK HAPPENS FOR ALL THE ITEMS AVAILABLE IN THE DOCUMENT THAT-
ARE RELEVANT FOR CREDIT CHECKS, IF THE CHECK BOX IS NOT SELECTED THEN THE CREDIT CHECK IS---
PERFORMED AT HEADER LEVEL.

(3) DEVIATION IN %: - HERE WE CAN MENTION THE DEVIATION %, FOR EXAMPLE A CUSTOMER PLACE-
AN ORDER OF 10 PC (100 INR PER PC) OF MATERIAL WHICH COST IS 1000 INR & THE DEVIATION RATE-
IS 10% BUT LATER ON THAT CUTOMER ADD SOME MORE QUANTITES TO THAT ORDER IF IT CROSS THE
DEVIATION % THEN SYSTEM WILL CARRIED OUT ANOTHER CREDIT CHECK

(4) NUMBER OF DAYS: - HERE WE CAN MENTION THE NUMBER OF DAYS AFTER WHICH SYSTEM WILL
CARRY A CREDIT RECHECK FOR CHANGE DOCUMENT ,THIS FUNCTION IS USED FOR CHECKING THOSE-
DOCUMENTS THAT HAVE ALREADY BEEN RELEASED BY A CREDIT REPRESENTATIVE, BUT THAT HAVE--
SUBSEQUENTLY BEEN CHANGED. THE SYSTEM DOES NOT CARRY OUT ANOTHER CREDIT CHECK IF THE
FOLLOWING CONDITIONS ARE MET: -

 THE VALUE OF THE CHANGED ORDER IS NOT GREATER THAN THE VALUE ALREADY APPROVED
FOR CREDIT (INCLUSIVE OF THE DEVIATION FACTOR)
 THE CURRENT DATE IS NOT GREATER THAN THE ORIGINAL RELEASE DATE PLUS THE NUMBER
OF DAYS SPECIFIED HERE.

(5) CREDIT LIMIT SEASONAL FACTOR: -HERE U CAN ADD SEASONAL FACTORS TO YOUR CREDIT CHECK.
FOR EXAMPLE DURING HOLIDAY SEASONS, IF YOU WANT TO RELAX OR RESTRICT YOUR CUSTOMER’S
PURCHASING POWER BY SOME PERCENTAGE, YOU CAN DO IT USING THIS CUSTOMIZATION CHECK.

(6) TYPE OF CREDIT CHECK: -STATIC, DYNAMIC, DOCUMENT VALUE, CRITICAL FILEDS, OPEN ITEMS

(7) REACTION: -BY MAKING AN APPROPRIATE SELECTION IN THIS FIELD, YOU CAN CONTROL HOW THE
SYSTEM REACTS IN SITUATIONS WHERE THE CREDIT CHECK FOR A DOCUMENT IS UNSUCCESSFUL. THE
AVAILABLE OPTIONS ARE AS FOLLOWS: -

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  BLANK: NO MESSAGE IS SENT TO THE USER.
 A: A WARNING MESSAGE IS ISSUED TO THE USER INFORMING THEM THAT THE CREDIT CHECK
WAS UNSUCCESSFUL.
 B: A ERROR MESSAGE IS ISSUED TO THE USER INFORMING THEM THAT THE CREDIT CHECK------
WAS UNSUCCESSFUL & THE DOCUMENT CANNOT BE SAVED
 C: THIS IS JUST LIKE A, BUT IT TELLS THE USER THE EXACT AMOUNT BY WHICH THE CREDIT------
EXPOSURE IS ABOVE THE CREDIT LIMIT.
 D: THIS IS JUST LIKE B, WITH THE INFORMATION PROVIDED TO THE USER ABOUT HOW MUCH-
MORE THE CREDIT EXPOSURE IS ABOVE THE CREDIT LIMIT

(8) STATUS: -USING THIS CHECK BOX WE CAN SET THE DOCUMENT STATUS AS BLOCKED/UNBLOCKED--
WHEN SELECTED THE DOCUMENT WILL BE BLOCKED IF IT FAILS THE CREDIT CHECK OTHERWISE IT WILL
NOT BE BLOCKED.

DETAILS OF DIFFERENT AUTOMATIC CREDIT CHECK: -

STATIC CREDIT: - AS THE NAME SUGGESTS, A STATIC CREDIT CHECK IS STATIC IN NATURE, THERE IS NO
TIME FACTOR WHEN THE CREDIT CHECK IS CALCULATED SAP PROVIDES TWO CHECK BOX,OPEN ORDER
AND OPEN DELIVERIES, WHICH CONTROL THE CREDIT CHECKS. BASED ON WHETHER YOU SELECT ONLY
SALES ORDERS, ONLY DELIVERIES, OR BOTH SALES ORDERS AND DELIVERIES FOR A STATIC CHECK, SAP
SELECTS THE DOCUMENTS.

DYNAMIC CREDIT: - A DYNAMIC CREDIT CHECK ALLOWS U TO USE THE HORIZON PERIODS FOR CREDIT
CALCULATION. WHICH DOCUMENT SHOULD BE PICKED FOR A CREDIT CHECK BY SAP, DEPENDS UPON-
WHAT HORIZON PERIODS YOU SET WHEN CUSTOMIZING IN THIS CHECK. YOU CAN DEFINE A HORIZON
IN DAYS, WEEKS, AND MONTHS. SO IF YOU SET A DYNAMIC CREDIT CHECK IN CUSTOMIZATION WITH--
A 2 MONTH HORIZON, SAP SYSTEM WILL IGNORE ALL OPEN ORDERS WHICH ARE DUE FOR DELIVERY---
BEYOND THIS PERIOD TO CALCULATE THE CREDIT EXPOSURE. IF THERE ARE ANY SALES DOCUMENTS---
FOR THE CUSTOMER THAT FALLS OUTSIDE THIS HORIZON PERIOD, THEY WILL BE EXCLUDED FROM THE
CREDIT CHECK. DYNAMIC CREDIT CHECKS CAN BE PERFORMED ONLY ON SALES ORDER

DOCUMENT VALUE: -THE VALUE IN THE FIELD MAX.DOC.VALUE, DECIDES HOW THE SYSTEM BEHAVES
WHEN THE MAXIMUM ALLOWABLE DOCUMENT VALUE IS EXCEEDED DURING CREDIT CHECK OF SALES
ORDER

CRITICAL FIELDS: -PAYMENT TERMS, FIXED VALUE DATE & ADDITIONAL VALUE DAYS ARE THE THREE-
PREDEFINED CRITICAL FIELDS IN SAP STANDARD SYSTEM, DURING CREDIT CHECK SAP SYSTEM WILL--
COMPARES & ENSURES THAT THE VALUES FOR THESE CRITICAL FIELDS MUST BE SAME IN SALES DOC-
AND CUSTOMER MASTER IF THE VALUES ARE THE SAME, THE DOCUMENT PASSES THE CREDIT CHECK
OTHERWISE THE CREDIT CHECK WILL FAIL..

CUSTOM DEFINED: - YOU CAN DEFINE UP TO 3 USER-DEFINED CREDIT CHECK RULES. FOR DEFINING--
YOUR OWN CREDIT CHECK RULES, SAP PROVIDES USER EXITS LVKMPFZ1, LVKMPFZ2, AND LVKMPFZ3
THAT CORRESPOND RESPECTIVELY TO THE USER 1, USER 2, AND USER 3 CHECK BOXES ON THE OVA8-
SCREEN.

9. CREATE CREDIT MASTER: - (FD32)

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S44

S45

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S46

S47

S48

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 S49
HERE FOLLOW THE ABOVE PROCESS TO CREATE CREDIT MASTER FOR THE CUSTOMER MASTER AND
CREDIT CONTROL AREA AS SHOWN IN S44-S49

09. ASSIGN CREDIT CONTROL AREA TO CUSTOMER MASTER: -

ASSIGN THE CREDIT CONTROL AREA TO CUSTOMER MASTER IN BILLING DOCUMENTS TAB OF SALES----
AREA DATA

11. CREATE SALES ORDER: - (VA01)

DURING SALES ORDER CREATION SYSTEM WILL CHECK THE SALES ORDER VALUE & OTHER OPEN ITEM,
THEN SYSTEM WILL ADD THE VALUE TO THE CREDIT EXPOSURE & CHECK AGAINST THE CREDIT LIMIT IF
THE EXPOSURE VALUE IS HIGHER THEN CREDIT LIMIT THEN SYSTEM WILL GIVE SOME MESSAGE

12. CREATE DELIVERY: - (VL01N)

DURING DELIVERY SYSTEM WILL CHECK THE DELIVERY VALUE AND OTHER OPEN ITEM, THEN SYSTEM-
WILL ADD THE VALUE TO CREDIT EXPOSURE AND CHECK AGAINST THE CREDIT LIMIT IF THE EXPOSURE
VALUE IS HIGHER THEN CREDIT LIMIT THEN SYSTEM WILL GIVE SOME MESSAGE & STOP U

13. DO PGI: - (VL01N/VL02N)

SIMILARLY DURING PGI (POST GOODS ISSUE) SYSTEM WILL CHECK DELIVERY VALUE AND OTHER OPEN
ITEMS, THEN SYSTEM WILL ADD THE VALUE TO THE CREDIT EXPOSURE & CHECK AGAINST THE CREDIT-
LIMIT IF THE EXPOSURE VALUE IS HIGHER THEN THE CREDIT LIMIT VALUE THEN SYSTEM WILL GIVE U--
SOME MESSAGE & STOP YOU TO DO THE TRANSACTION.

PREPARED BY
RAJESH DASH
SAP MM/SD CONSULTANT

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