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Credit Management/Risk Management
With the help of credit management the business keeps a check over all those customers to
whom credit has been granted so as to recover the amount from them which they owe to
the business.
There are two types of Credit checks which can be configured into SAP and that are:
1) Simple credit limit check &,
2) Automatic credit limit check
Under Automatic credit limit check there are another two types and that are:
a) Static credit limit check &,
b) Dynamic credit limit check.
Static credit check is actually the credit check comprising of all the open sales orders, open
sales deliveries, open billing items and all the rest of open items
Where as dynamic credit check is the sum of all the factors present inside the static credit
check plus the time horizon
While configuring the credit management settings in SAP, we configure the following under
financial a/cing:
i) Define Credit groups
ii) Define Risk categories
iii) Define Credit representative groups
iv) Define Credit representatives
Formerly we define and assign a credit control area to our enterprise structure
Credit control area can be centralized or a decentralized. For one centralized credit control
area, there will be only one credit control area operating under the company code but for
the decentralized credit control area there will be many credit control areas under one
company code.
So exactly the relation between company code and credit control area is many to many
Under the risk categories the customers are divided in to:
a) High risk category
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b) Medium risk category &,
c) Low risk category
And accordingly the credit representative groups are defined with respect to the no. of risk
categories and thereby the representatives too with their contact details
After this there are the required settings which needs to be done for our sales and
distribution under it’s tab i.e. to enter the settings like:
Specify the subtotal as A (KONV-CMPRE) to gross value or the net value per item to take the
base amount of credit exposure of a line item.
The output type for the credit management is KRML and under the partner determination
the credit representative (KB) and the credit manager (KM) are the partners.
The condition records for credit management are maintained under the trx. Code VV11.
In the condition records credit management has got the provision to send an express mail,
a carbon copy or a blind mail to the recipient being specified under the recipient column.
Moreover has got the transmission options as ‘Do not send before’ and ‘After sending move
to outbox’ and finally ‘No forwarding’, with each having their own individual influences on
the type of communication with the recipient of the dunning notice or any other issue
pertaining with credit management.
The active receivables of sales document line item for credit related management functions
can be configured with the respective settings
Under receivables risk management the payment guarantee forms, schemes are defined
and assigned along with it’s determination.
Configuration for simple credit management is very simple and we need to assign the
related match code against the required document type for e.g. A, B or C against document
type OR.
Credit check can be carried out at three important levels:
1) Sales order level
2) Delivery document level
3) PGI level
The customer credit master is maintained under FD32, where we come across with the
following tabs for :
Overview, Address, Central data, Individual limit, Status &, payment history.
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Release the sales document at VKM4: All the sales document, VKM3: Sales document &,
VKM5: Delivery documents
Which are been blocked due to credit check.
Automatic credit check is carried out at all of the above three levels of sales transaction
where we need to define the credit group, assign the sales documents and delivery
documents, credit limit check for delivery types and ultimately needs to define the
automatic credit control under OVA8.
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Incompleteness Procedure:
Here the functionality deals with the below mentioned fields only to maintain values in the
certain fields that are valid to process subsequent documents.
Define Status group for General, Delivery, Billing document, Price, Goods movement,
Picking/Putaway, Pack.
Text Determination Procedure
With the help of this functionality business can issue the sales notes, credit notes or
packing information to the customer that can be printed. Text can be determined for
certain text objects e.g. customers, material, conditions, customer material info record
conditions, sales, delivery, billing, header & items & sales activities.
Text determination works upon the condition technique i.e. the condition tables Access
SequenceCondition type Procedure.
Only PRICA does not utilizes the condition technique concept i.e. the Partner determination
procedure, Route determination procedure, Incompleteness procedure or log, Credit
management and the Availability check functionality.
Define and assign text determination procedure settings are the first available settings
under the Customer Sales and distribution in the selection screen of the text determination
procedure. Moreover the rest of the configuration settings needs to be made under the
Sales header and text types.
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We have to first of all:
1) Define a Text ID,
2) Then needs to define a text determination Procedure
3) Assign the text Id to that text determination Procedure
4) Assign the text determination procedure to customer a/c groups.
Text ID  Text Determination Procedure Customer A/c Group
Under the sales document header functionality we will repeat all the above steps along
with one very important step of defining the access sequence and there by assigning it to
the text ID so the flow here is as below:
Access Sequence Text ID Text Determination Procedure Sales document header.
OUTPUT DETERMINATION PROCEDURE
The transactional data from sales, deliveries, billing document is transferred from SAP
system to the non SAP system by using various transmission media. Output determination
procedure defines what kind of output type, through which transmission media and to
which partner function.
We maintain the output condition records under the trx. code VV11.
If the output has to be printed immediately then the device name would be LP01.
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The Item proposal functionality as well as the assortment module under the value contract,
both acts as an order entry tool.
The trx. code for contracts is VA41, where as for Scheduling agreements it is VA31.
We have to maintain a separate pricing procedure (WK0001) & pricing procedure
determination with the condition type WK00 for Value contract.
There will be billing in both consignment issue and consignment return but there will be no
billing under consignment fill up and consignment pick up.
There are no schedule lines for contracts, hence delivery document cannot be created with
reference to contracts. To create delivery document with reference to contract; sales order
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is going to be created as a “release order” & with reference to which delivery document is
going to be created.
Another document “WA” can also be used as a release order for value contract.
In Service and maintenance contract along with rental contract, there is no delivery. The
process flow is VA41 VF01.
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