Monitoring Credit During Sales and Distribution Processing (SAP Library

Monitoring Credit During Sales and Distribution Processing

Purpose

This process enables you to monitor credit when processing customer orders.

Prerequisites

You have implemented the Accounts Receivable (FI-AR) and Sales and Distribution (SD) application components.

The master data for those customers whose credit you wish to monitor is created in both Sales and Distribution and Financial Accounting.

The credit data for those customers whose credit you wish to monitor is created. You determine how high a customer’s credit limit is to be when creating this data.

In Customizing for Enterprise Structures you defined one or more credit control areas and assigned these to one or more company codes.

In Customizing for Sales and Distribution you defined at which point (when an order is received or when delivery is carried out, for example) the credit check should take place. You do this under Basic Functions → Credit Management/Risk Management → Credit Management → Define Automatic Credit Control.

Process flow

You enter a sales order.

Assuming that this sales order leads to the credit limit being exceeded for this customer, the system now responds in one of two ways (depending on the settings you made in Customizing for Sales and Distribution.) For more information, see Automatic Credit Control.

It outputs an error message, but prevents you from saving the order.

It outputs a warning message, but does not prevent you from saving the order. It blocks the order.

In the second case, the procedure continues as follows:

2. If the order is blocked, the credit representative processes the blocked order either from a list of blocked sales and distribution documents, or from his/her Mailbox. You define whether or not a mail is sent to a credit representative in Customizing under the menu path Logistics - General ® Promotion ® Message Determination.

The credit representative now decides how to proceed with this order. From the list of blocked documents he or she can use the Information Functions (such as credit master sheet and early warning list) in Credit Management to help make the decision.

Once the credit representative releases the order, a delivery can be created and a billing document generated.

Once you have saved this document, the system automatically creates a financial accounting document.

The customer pays the invoice that you created in the previous step. You then post the incoming payment in Accounts Receivable.

Processing an Accounting Transaction Using Credit Management