Configure and Customize SAP Automatic Credit Management | SAP Blogs https://blogs.sap.com/2013/09/07/configure-and-customize-sap-automati...

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Configure and Customize SAP Automatic

Credit Management
September 7, 2013 | 25,536 Views |

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FIN (Finance)

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1 of 17 6/18/2018 5:27 PM
Configure and Customize SAP Automatic Credit Management | SAP Blogs https://blogs.sap.com/2013/09/07/configure-and-customize-sap-automati...

Credit management is the management of credit facility granted to customers as

credit exposure allowed. Credit facility is just like telling our customers that they
need not pay immediately, they can pay at a future point of time after receiving
the goods or services. But, this payment at a future point of time involves risk.
So, according to the risk foreseen, the amount and time of credit (Credit
Exposure) granted changes. For some customers, the risk perceived may be
high such that we may demand payment in advance.
This credit management comes partially under preview of Sales and Distribution
(SD) and partially of Account Receivables (AR).

Reducing credit risk without hampering the supply chain.

Before getting involved, ask yourself:

How do I react to a bad debt?
Do I block orders from important customers, or do I grab a phone?
What is the volume of blocked orders my F&A department can handle?
Can I afford to block customers (small customer base)?
What do I save?
What is the cost in terms of damage?

Assuming that we already have SD and AR implemented, credit management

can be broadly used to:
Assign credit limit to customers
Facilities like the credit master sheet or early warning list help you
monitor the customer’s credit situation
Automatic credit limit checks as well as to specify the points at which
they have to be carried out

Automatically alert the credit representative of a customer’s critical credit

situation as soon as order processing starts and he may be able to check a
customer’s credit situation quickly and reliably, and, in line with the appropriate
credit policy, to decide whether the customer should be granted credit.

Every customer is having a certain credit limit, which is measured and

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Configure and Customize SAP Automatic Credit Management | SAP Blogs https://blogs.sap.com/2013/09/07/configure-and-customize-sap-automati...

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Configure and Customize SAP Automatic Credit Management | SAP Blogs https://blogs.sap.com/2013/09/07/configure-and-customize-sap-automati...

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Configure and Customize SAP Automatic Credit Management | SAP Blogs https://blogs.sap.com/2013/09/07/configure-and-customize-sap-automati...

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Configure and Customize SAP Automatic Credit Management | SAP Blogs https://blogs.sap.com/2013/09/07/configure-and-customize-sap-automati...

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Configure and Customize SAP Automatic Credit Management | SAP Blogs https://blogs.sap.com/2013/09/07/configure-and-customize-sap-automati...

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Configure and Customize SAP Automatic Credit Management | SAP Blogs https://blogs.sap.com/2013/09/07/configure-and-customize-sap-automati...

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Configure and Customize SAP Automatic Credit Management | SAP Blogs https://blogs.sap.com/2013/09/07/configure-and-customize-sap-automati...

The relation between open items which are more than a certain number of
days overdue and the customer balance may not exceed a certain
percentage. These values are defined in the customizing for automatic
credit control.
Use it for Credit Group 01 (Orders) in conjunction with
Static Credit Check for slightly higher risk category customers, where you
don’t want to have more than a certain % of open items. The values may be
reduced with increase in risk category values.

The oldest open item may not be more than a specified number of days
overdue.
Use it for any Credit Group 01 or 02 (Orders or deliveries)
in conjunction with Static Credit Check for slightly Low-Medium risk category
customers.

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Configure and Customize SAP Automatic Credit Management | SAP Blogs https://blogs.sap.com/2013/09/07/configure-and-customize-sap-automati...

The customer’s dunning level may only reach a specified maximum value
exceeding which the item may be blocked if so configured.

For e.g. Cheque received from a customer bounced,

then subsequent orders may get blocked.

For each customer, credit limits are specified in the particular credit master
record. If the customer exists in multiple credit control areas, individual limit can
be specified for each credit control area. In addition, a central credit limit can
also be specified for all the credit control areas under which the customer exists.
Then, the total of the credit limits for each credit control area should not exceed
the central credit limit.
FD32 (FI T code) is used to set credit limit and credit risk category for the
customer.

It gives an overview of credit settings of the customer.

Customer‘s credit limit, credit exposure, percentage of credit limit used

and horizon (as applicable in dynamic credit check) are presented as

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status
Payment history along with the average number of days taken for
payment is shown
Payment data contains details such as authorized cash discount and
unauthorized cash discount that was available for cleared items, the
outstanding receivables in sales days
Dunning data consists of dunning area for the customer, when he was
last dunned and the dunning level reached during the last dunning run
Control contains the credit risk category of the customer, date of the last
check on customer credit limit, if the customer is blocked for credit
management business transactions, the credit representative group
responsible for the customer, the payment history classification, the
financial standing of the customer and date when the credit check of the
customer was carried out last.

It gives an overview of central credit limit settings of the customer.

The maximum permitted credit limit as a total of limits across all credit
control areas to which the customer is assigned
The maximum permitted individual credit limit that a customer can have
under any one credit control area
The currency in which the two maximum limits are specified. This is

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because we can enter the central data in any currency of choice,

independently of the currencies of the control areas
The currently exhausted credit limit as a total (percentage) across all
credit control areas to which the customer is assigned (should be less
than or equal to max limit)
The currently assigned largest credit limit across all credit control areas
to which the customer is assigned (should be less than or equal to max
limit)
Date on which the most recent general information about the customer
was obtained

Shows the customer’s actual individual details according to particular credit

control area

The credit limit for the credit control area, credit account if the limit is to
be specified for a group of customers, the percentage of credit exposure,
horizon date to be taken into consideration, the receivables, special G\L
transactions and the order value not yet transferred to FI used for the
credit exposure calculation as well as the amount of secured receivables
is shown under credit limit data
The credit risk category, credit representative group, customer credit
group and customer group used mainly for sorting or reporting, the
reference data for customer credit review, if the customer is blocked for

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credit management business transactions, the last and next internal

review date for the customer credit limit as applicable to the particular
credit control area are shown under Internal data
The date of last external review, the credit information number as
applicable to external agency, the classification of payment history of the
customer as well as the financial standing is shown under external data

When sales order is created (SD), system verifies the credit limit used by the
customer by communicating with values set in FD32 (FI)

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Block will be released if the Agent discussed with Customer and / or

payment is received from Customer. VKM1, VKM3 and VKM5 are key T codes
used to release Sales and Delivery documents from Credit Block. For the
document selected, the following options are available:

Grant the credit and release the document

Reject the credit and cancel the document
Forward the blocked document to another processor
Recheck the blocked document
Reassign the blocked document and specify a new sequence of
documents. This enables to give priority to and release several
documents with a low document value until their credit limit is completely
used up, instead doing so for a single document with a high document
value that has already exceeded its credit limit.

RFDKLI10 – Customers with missing credit data

RFDKLI20 – Reorganization of credit limit for customers in credit control
areas
RFDKLI30 – Central and credit control area related data for customer
(short overview)
RFDKLI40 – Overview credit limit (extensive)
RFDKLI41 – Credit master sheet

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RFDKLI42 – Early warning list

RFDKLI43 – Master data list especially for printing customer cards along
with data from external systems
RFDKLI50 – Mass change for master data in credit management
RFDKLIAB – Display changes for credit management data
RVKRED06- Checking blocked credit documents
RVKRED08 – Checking sales documents which reach the dynamic credit
check horizon (periodic report)
RVKRED09 – Checking the credit documents from credit view (released
documents are checked only if the validity period for the release is up)
RVKRED77 – Reorganization of open credit, delivery and billing
document values especially when update errors occur
RVKRED88 – Simulation reorganization credit data SD

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