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Credit Management IN Sap SD

The document defines credit management in SAP SD and the different types of credit management. It discusses centralized and decentralized credit management approaches. It then explains the key differences between simple credit limit check and automatic credit control. Simple credit limit check only considers open items when checking the credit limit, while automatic credit control considers all open orders, deliveries, invoices and items. It provides examples of how each approach handles orders in relation to the credit limit.

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Ranjith Suddala
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517 views14 pages

Credit Management IN Sap SD

The document defines credit management in SAP SD and the different types of credit management. It discusses centralized and decentralized credit management approaches. It then explains the key differences between simple credit limit check and automatic credit control. Simple credit limit check only considers open items when checking the credit limit, while automatic credit control considers all open orders, deliveries, invoices and items. It provides examples of how each approach handles orders in relation to the credit limit.

Uploaded by

Ranjith Suddala
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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CREDIT MANAGEMENT

IN
SAP SD
Definition :
CREDIT MANAGEMENT
 Credit Management is a process in which Company sells a product / service to customers on
credit basis. The company collects payments from customer at a later time , after sale of product.
The amount of credit  fixed  by a company for a customer is  called credit limit.
 It will reduce the Risk of the company.

 The customer can Purchase the product from a company within the credit limit, and when the
credit limit is crossed, order is blocked by the system.
1st order
30k €
 Eg: Consider a Company creates a credit limit for Customer of  100k € . Customer can purchase
the product from the company on credit till the credit limit  100k €. is reached. Customer gives an
Order # 1 of amount 30k. Again Customer gives an Order # 2 of the amount 40k. This order also Credit
goes on . Again customer place the order # 3 of amount 31k Now, the  total open order crosses limit
credit limit of a customer. Order 3 is   blocked by the system due to credit limit reached.
100k €

3rd order
2 order
nd
31k €
40k €
blocked
CENTRALIZED , DECENTRALIZED
CREDIT MANAGEMENT
Centralized Decentralized credit
credit management management

Credit control Credit control Credit control Credit control


area 1 area 1 area 2 area 3

Company code 1 Company code 2 Company code 3 Company code 1 Company code 2 Company code 3

Credit control area:


 A credit control area is an organizational unit in which the customer credit limits are managed in SAP.
 You can assign one or more company codes to a credit control area .

The relation between company code to credit control area is one to one.
Credit control area to company code is one to many
TYPES OF CREDIT
MANAGEMENT

Credit
Management

Simple credit automatic


limit check credit control
UPDATE GROUP
SIMPLE CREDIT LIMIT
CHECK
VS
AUTOMATIC CREDIT
CONTROL
Simple credit limit check Automatic(Static) credit check
   
 In simple credit limit check there is no concept of risk  In automatic credit control we have risk categories
category.  High risk
 In simple credit limit check system consider only  Low Risk
receivables (open items) means invoice raised,  In automatic credit control considers all open order
accounting document generated but not yet paid. values, all open delivery values, all open invoice
 In simple credit limit check system consider present values, all open item values into credit management.
order value and receivables while performing credit  
check.
 
 
SIMPLE CREDIT LIMIT CHECK
 In simple credit limit check system consider present order value and receivables while performing credit
check.
 Define credit control area
 Assign company code to credit control area

(or)
 Assign sales area to credit control area
 maintain customer credit master(FD32)
 In pricing procedure maintain sub total A for Total document value
 in item category check credit active
SIMPLE CREDIT LIMIT CHECK

Open Order values

If it exceeds also
Open Delivery values Credit Exposure no block

Open Invoice values

If exceeds
Open Item values
block
SIMPLE CREDIT LIMIT CHECK
AUTOMATIC CREDIT CONTROL
Customization:
 Define credit control area
 Assign company code to credit control area
 Define credit groups
 Assign credit groups to sales document types
 Assign credit groups to delivery types
 Automatic credit control
 Maintain customer credit master(T.code:FD32)
 In pricing procedure maintain sub total A for Total document value
 in item category check credit active
AUTOMATIC CREDIT CONTROL
If it exceeds
Open Order values block

Open Delivery values

Credit Exposure

Open Invoice values

If not exceeds
no block
Open Item values
AUTOMATIC CREDIT CONTROL
AUTOMATIC CREDIT CONTROL

 T code to release blocked documents is VKM3

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