Credit Management

Credit limit check with increase, stop access for customer and partners; block individual purchases can be performed. Customers' credit profile can also be displayed.

A credit limit check can be carried out when sales documents are created or changed. The check is carried out by the system within one credit control area. If you change quantities or values in a document, the check is repeated. A credit control area consists of one or more company codes. A sales document belongs to one credit control area depending on the allocation of the sales organization to a company code. The SAP System checks the credit limit that was granted to the customer in this credit control area. The credit control areas and the credit limit of a customer are defined in financial accounting and entered in the customer master record. During the check, the SAP System totals the receivables, the open items and the net value of the sales order for every item of a sales document. The open items take into account obligations bound by contract that are not recorded for accounting purposes but involve expenses through diverse business transactions. After that, it compares the total with the credit limit. If the limit is exceeded, the system responds in the way you defined in the configuration menu.

We are using automatic credit control in this solution. During the automatic credit control, you can configure a system reaction (A: warning, B: error, C: A + value by which the credit limit is exceeded, D: B + value by which the credit limit is exceeded). When the credit limit is exceeded, we use option C (warning + value by which the credit limit is exceeded).

The system provides a transaction to list all sales documents that have been blocked for delivery, with information about what has caused the block. The customer's current credit situation is manually reviewed by the credit department, and when the sales order is approved, the delivery block is removed from the sales order. You can jump directly from the list to an individual document.

This scenario consists of the following steps:

• A credit limit is set
• Blocked sales orders are reviewed and released

• Reduce risk of bad debt
• Focus on reliable and profitable customers
• Faster credit-worthiness check
• Fasten the process of checking a customer credit limit
• Identify the overall credit risk of your company