CREDIT MANAGEMENT

Credit Management:

Credit limit check is carried out in SAP when sales documents are created or changed. The check is carried out by the system within the credit control area that has been configured for EIL. If quantities or values are changed in a document, the check is repeated for the document. A sales document belongs to one credit control area depending on the allocation of the sales organization to a company code. Here, sales organization 3000 has been assigned to company code 1000. The following credit control areas will be defined: 1000 EIL Credit Control Area for the company code 1000. Company code will have one credit control area assigned to it. A credit control will be for Regular Business.

Credit Limits would be defined only for selective customers. Credit Limit will be maintained for the Advance received or Security Deposit for the customer or against Letter of Credit (with different terms and conditions). This process is done manually and credit limit can be updated anytime for the customers when needed. The master data for customer master has to be maintained through Transaction code XD02. The credit limit master data has to be maintained through Transaction code FD32

The customers for whom credit limits would be defined, the credit management would be as given below: 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. For customers whose credit limits are maintained in the system the order will not get blocked. 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. If the limit is exceeded, the system responds in the option that has been decided to be used 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 customers 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. 1

CREDIT MANAGEMENT If the customer is in overdue then the system would give a warning about the overdue Based on the overdue days defined for a customer, the system will block the order after it is entered and saved. Delivery would not be possible as a result of order blocked due to credit control check. Order will be released by the relevant Credit Control authorized person at H.O. After the order has been released, delivery would be possible and hence billing can be done. Blocking and Mark for Deletion is possible for customers as per requirements. The system will give a list of orders blocked due to credit limits and overdue. The system will also give a list of orders which were released due to credit limits & overdue. From the list of blocked documents, the Information Functions (such as credit master sheet and early warning list) in Credit Management can be used to help make the decision. Once the concerned person releases the order, a delivery can be created and a billing document generated. You can change the credit limits of customers at any point of time. Credit Limit checks will be given only at Sales order level.