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Sandeep Agarwal
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FIN (Finance)
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Introduction
https://blogs.sap.com/2013/09/07/configure-and-customize-sap-automatic-credit-management/ 1/23
12/21/2017 Configure and Customize SAP Automatic Credit Management | SAP Blogs
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).
Key challenge: Reducing credit risk without hampering the supply chain.
Credit Check
https://blogs.sap.com/2013/09/07/configure-and-customize-sap-automatic-credit-management/ 2/23
12/21/2017 Configure and Customize SAP Automatic Credit Management | SAP Blogs
Configuration Setting
SPRO > Enterprise Structure > Definition > Financial Accounting > Define
Credit Control Area
https://blogs.sap.com/2013/09/07/configure-and-customize-sap-automatic-credit-management/ 3/23
12/21/2017 Configure and Customize SAP Automatic Credit Management | SAP Blogs
The type of update chosen controls when the values of open sales orders,
deliveries and billing documents are updated depending upon the type of
document being generated. One of the following update groups can be chosen
as available in standard SAP
Blank – If the field is left blank, the SD documents are ignored and
only open receivables and open special G/L items are used for
calculating credit exposure.
000012 – When a new order is created, the open order value is
added to the credit exposure. When the order is delivered, the open
order value is subtracted and the open delivery value added to the
exposure. On billing the delivery, open delivery value is subtracted
and the open billing value is added to the exposure. When billing
posts to accounting, the open billing value is subtracted and the open
A/R value added to the exposure. The exposure is finally reduced
when the cash is applied against open A/R.
000015 – Calculates exposure without considering open sales order
value. When the order is delivered, the open delivery value is added
to exposure. On billing the delivery, open delivery value is subtracted
and the open billing value is added to the exposure. When billing
posts to accounting, the open billing value is subtracted and the open
A/R value added to the exposure. The exposure is finally reduced
when the cash is applied against open A/R.
00018 – This is relevant for non-delivery-relevant orders only. When
a new order is created, the open delivery value is added to the credit
exposure. When the order is billed, the open delivery value is
subtracted and the open billing added to the exposure. When billing
posts to accounting, the open billing value is subtracted and the open
A/R value added to the exposure. The exposure is finally reduced
when the cash is applied against open A/R.
Depending on the relationship between credit control area and company code,
the credit management can be categorized as:
Every company code has its own credit control area. Hence, we
can define credit limits for a customer separately for each company
code. This method delivers benefits such as the local payment
cultures can be respected, each company code has the
independence to make its own decisions.
Centralized credit management
Multiple company codes are clubbed under the same credit control
area. So, if the customer transacts with company codes which are
under the same credit control area, the limit is set for all the
company codes combined together.
If the currencies of these company codes are different from that of the credit
control area, the receivables are converted to the credit control area currency to
check with the credit limit set. Centralized credit management has benefits such
as easier analysis of credit policy and modifications required, the focus is
shifted to other important areas such as bad debt reductions and improved
customer relations as there is only a central credit team that needs to be
consulted irrespective of the geography etc.
SPRO > Enterprise Structure > Assignment > Financial Accounting > Assign
Company Code to Credit Control Area
https://blogs.sap.com/2013/09/07/configure-and-customize-sap-automatic-credit-management/ 5/23
12/21/2017 Configure and Customize SAP Automatic Credit Management | SAP Blogs
SPRO > Enterprise Structure > Assignment > Sales and Distribution > Assign
Sales Area to Credit Control Area
SPRO > Sales & Distribution > Basic Functions > Credit Management and Risk
Management > Credit Management > Define Credit Groups.
The credit group specifies which subsequent transaction can be blocked for
processing, if the credit limits are exceeded.You can use the default credit
groups or create new once.
https://blogs.sap.com/2013/09/07/configure-and-customize-sap-automatic-credit-management/ 6/23
12/21/2017 Configure and Customize SAP Automatic Credit Management | SAP Blogs
https://blogs.sap.com/2013/09/07/configure-and-customize-sap-automatic-credit-management/ 7/23
12/21/2017 Configure and Customize SAP Automatic Credit Management | SAP Blogs
unblocked.
The simple credit check compares the payer customer master record’s
credit limit to the net document value plus the value of all open items.
In case the value of the document and open items is more than the credit
limit:
System may respond with a warning message in the sales order [OR]
Warning message and a delivery block [OR]
Error message, which will cause the document not to be saved.
https://blogs.sap.com/2013/09/07/configure-and-customize-sap-automatic-credit-management/ 8/23
12/21/2017 Configure and Customize SAP Automatic Credit Management | SAP Blogs
https://blogs.sap.com/2013/09/07/configure-and-customize-sap-automatic-credit-management/ 9/23
12/21/2017 Configure and Customize SAP Automatic Credit Management | SAP Blogs
The sales order or delivery value may not exceed a specific value which is
defined in the credit check. The value is stored in the currency of the credit
control area. This check is useful if the credit limit has not yet been defined for a
new customer. It is initiated by a risk category which is defined specifically for
new customers.
Recommended Use: Use it for Credit Group 01 (Orders) and high risk category
customers which you always want to review beyond a particular value. It may
also be used for prepaid or one-time customer with Max doc value.
Critical Fields:
This Credit check is initiated by document changes done in credit sensitive
fields. One such example is terms of payment. When this field changes, a
check is done on the data in sales order against the data in the customer
master.
https://blogs.sap.com/2013/09/07/configure-and-customize-sap-automatic-credit-management/ 10/23
12/21/2017 Configure and Customize SAP Automatic Credit Management | SAP Blogs
Overview Screen
https://blogs.sap.com/2013/09/07/configure-and-customize-sap-automatic-credit-management/ 11/23
12/21/2017 Configure and Customize SAP Automatic Credit Management | SAP Blogs
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
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
https://blogs.sap.com/2013/09/07/configure-and-customize-sap-automatic-credit-management/ 12/23
12/21/2017 Configure and Customize SAP Automatic Credit Management | SAP Blogs
Status Screen
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
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
https://blogs.sap.com/2013/09/07/configure-and-customize-sap-automatic-credit-management/ 13/23
12/21/2017 Configure and Customize SAP Automatic Credit Management | SAP Blogs
When sales order is created (SD), system verifies the credit limit used by the
customer by communicating with values set in FD32 (FI)
https://blogs.sap.com/2013/09/07/configure-and-customize-sap-automatic-credit-management/ 14/23
12/21/2017 Configure and Customize SAP Automatic Credit Management | SAP Blogs
Reports
https://blogs.sap.com/2013/09/07/configure-and-customize-sap-automatic-credit-management/ 15/23
12/21/2017 Configure and Customize SAP Automatic Credit Management | SAP Blogs
Alert Moderator
24 Comments
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subhash pandit
Dear Sandeep,
Regards
Subhash P.
Gulshan Batra
Regards
Gulshan
Advait Kulkarni
https://blogs.sap.com/2013/09/07/configure-and-customize-sap-automatic-credit-management/ 16/23
12/21/2017 Configure and Customize SAP Automatic Credit Management | SAP Blogs
Advait
Karteek k
Lakshmi Sama
Hello Sandeep,
Regards,
Lakshmi S
Jurairat Damrongtham
Dear Sandeep,
I would like to ask more about dynamic credit check. If I set at 3 options as follow:
– Dynamic
– Document value
– Open items
1. How the system work? SAP will check from Dynamic -> Document value -> Open
items or Open items -> Document value -> Dynamic?
2. After SAP have checked and display credit blocked message. If system found
credit blocked from ‘Document value’ and ‘Open items’ , How SAP display credit
https://blogs.sap.com/2013/09/07/configure-and-customize-sap-automatic-credit-management/ 17/23
12/21/2017 Configure and Customize SAP Automatic Credit Management | SAP Blogs
Jurairat D.
Vinod Vemuru
Thanks,
VV
G Lakshmipathi
G. Lakshmipathi
Phanikumar Valiveti
I dont know why moderator approved this again even after my alert…
Phanikumar
Sandeep:
Very useful .
Phanikumar Valiveti
Sorry to tell you that there a mistake in your document while sharing about dynamic
credit check about Horizon period.
as per you–
Here the System will not consider the Open items 1, 2, 3 & 4 values for beyond 3 months“”””
No— here-actually system will divides this 1,2,3,4 as two parts—2,3,4 will be fixed called as static
part and the the first option 1 will be called as dynamic part(open sales orders)
(2,3,4 will be taken in credit calculations if lying beyond 3 months)
the only difference is whether open sales order(with confirmed delivery schedule lines)–has to be
considered in credit calculations or not(if lies in these 3 months–then this open sales order value
will be added in credit calculations–otherwise no)
Phanikumar
Sada Bandla
Hi Sandeep,
Regards ,
https://blogs.sap.com/2013/09/07/configure-and-customize-sap-automatic-credit-management/ 19/23
12/21/2017 Configure and Customize SAP Automatic Credit Management | SAP Blogs
Sada Bandla
G Lakshmipathi
Sandeep Agarwal
Please check Phanikumar V comments, retest the scenario and change your blog if
necessary.
G. Lakshmipathi
kajendran jayaraman
Hi Lakshmipathi,
Do we need to run the below two program also? because sometime, the
orders are keep on going to block.
Mariks .
https://blogs.sap.com/2013/09/07/configure-and-customize-sap-automatic-credit-management/ 20/23
12/21/2017 Configure and Customize SAP Automatic Credit Management | SAP Blogs
Ashok J S
Kundan Kumar
nice document…
R MG
Hello,
Thanks for the document, very usefull, during an Audit review with a client i came
accross with the next question:
Reviewing this process with a client I verified that when the Customer excided the
credit limit assigned in SAP, the system automatically blocked the purchase
requisition. In order to release it the Credit, the Clerk needed the Management
authorization and this was done manually and outside SAP. Once she had the
authorization sheet signed the clerk manually released the PR.
I wonder if it is possible to configure a SAP work flow in order to release credit block
as when the control is manually performed it could be easily override.
Thanks in advance
Regards
https://blogs.sap.com/2013/09/07/configure-and-customize-sap-automatic-credit-management/ 21/23
12/21/2017 Configure and Customize SAP Automatic Credit Management | SAP Blogs
Karteek k
Hi,
Nice document.
Regards
Karthi
Nilima Choudhari
Good job!!
Venkatanarayanan G
But one clarification in this, For Dynamic Credit Check, the horizon period is only for
the Open Sales Orders and not for all Items.
Regards
G.Venkat
Dear Sandeep:
https://blogs.sap.com/2013/09/07/configure-and-customize-sap-automatic-credit-management/ 22/23
12/21/2017 Configure and Customize SAP Automatic Credit Management | SAP Blogs
Cheers,
Hi
We have the full credit up and running, I released from the credit perspective a Sales
Document with VKM3, but the Business Unit keeps working on the order and the
Hold is triggered automatically again. So they have to come to us and request a
credit release again; (eventhough it was approved already).
Is there anyway I can configure the Sales Order to avoid going back on hold after it
has been released for the first time?
Regards
https://blogs.sap.com/2013/09/07/configure-and-customize-sap-automatic-credit-management/ 23/23