Special sales processes

Define credit control area Background The purpose of credit management is to monitor credit status of customer so as to take decision on continuing or reviewing credit related decisions like increasing credit limit or blocking delivery to the customer.

This is done with financial accounting integration as in most of the companies, credit management is FI function. Instructions Pre-requisite Company code is created in enterprise structure of financial accounting. Define Credit Control Area:

Menu path: Enterprise structure → Definition → Financial accounting → Credit Control Area Click This is FI configuration and not part of SD configuration

Double click on credit control area, which you want to select

Key fields are as below. Update group – It determines how credit value should get updated at the time of order, delivery and billing. If a document cannot be processed with the update group you specify, the system determines the next possible update it can carry out. For example, you select Update group 000012, which, at delivery, reduces the open order value and increases the open delivery value. Assume that one item in the order is not relevant for delivery. In this case, the system automatically

determines Update group 000018 for this item. Update group 000018 increases the open delivery value for the order item. The system uses the confirmed quantity of delivery-relevant schedule lines to update the order value. Risk category – Risk category entered in the related control area of the customer's credit master record, which is automatically created when a customer is created in a company code.

The credit master record is automatically maintained when at least one of the following fields is maintained for the corresponding control area.

• Risk category – defined in FI accounting - Credit Management--->Credit control account--->Define Risk categories. • Via the customer master record, you can allocate every customer to a credit risk category. This is used if automatic credit control is used. • Menu path: Customer master - Environment – credit management

Credit representative group Credit limit - This credit limit is not a total credit limit for the control area. In this way you ensure that a credit restriction will be effective for new customers, too, as soon as the customer has been created. If no credit master record has been maintained, there is no credit limit.

6.2 Type of Credit check Background There are major two types of credit checks can be performed. They are • No credit check • Simple credit check or Dynamic check for a particular order type. Instructions Menu path: SD – Basic Functions – Credit Management – Assign Sales documents and delivery documents Click Pop-up as below Select “Credit limit check for order types” and click

On the next screen, click and select order type as “OR” Simple Credit Check (Option A or B or C) During the check, the SAP System totals the receivables (A claim for payment on the recipient of goods or services supplied.), the open items from special G/L transactions and the net value of the sales order for every item of a sales document. The open items from special G/L transactions take into account obligations bound by contract which are not recorded for accounting purposes but which involve expenses through diverse business transactions. Example - the value of materials in the warehouse that have been reserved for an order or project

The total is compared with the credit limit. If the limit is exceeded, the system responds in the way defined by you in the configuration menu. If credit limit exceeds, system responds giving A. Warning message in sales order. B. Warning message and a delivery block (which will allow order to be taken but blocked for delivery). C. Error message that will not allow you to save the order. Automatic Credit Check Check credit has value “D” Credit limit check can take place @ Sales order entry Delivery Goods issue For this, Automatic credit control defines “Document Credit Group” for each Sales Order, Delivery and Goods issue.

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