1/20/13 Basic Configuration setting for Credit Management | SCN

scn.sap.com/docs/DOC-28086 1/6
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created by . patchala on May 14, 2012 4:08 PM, last modif ied by . patchala on May 15, 2012 11:42 PM
Hi friends ,

Here i am trying to explain the configuration steps for credit management and this article is for people who wants the
basic and step by step configuration for credit management

In sap there is two different types of credit controls those are 1) Static 2) Dynamic

In Static check there is no Horizon period, and in dynamic you have horizon period.

Horizon period is the duration of the time. If you maintain horizon period as 2 months, then all the open
documents that are with in this period are taken for credit check, documents beyond that are not for
consideration. in static system will consider the all open document till now.

Configuration settings:

1) Define Risk Category:
SPRO -- > Financial Accounting -- > Account Receivable and Accounts Payable -- > Credit Management -- > Credit
Control Account -- > Define Risk Categories
Go to NEW ENTRIES and create the Risk Category with the combination of Credit Control Area.
Save the record.

2) Define Credit Control Area:
It is the responsible organizational element which takes care of all the credit management activities in a company
code.
SPRO --> Enterprise Structure -- > Definition -- > Financial Accounting -- > Define Credit Control Area.
Go to NEW ENTRIES and create the Credit Control Area.
Basic Configuration setting for Credit
Management
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1/20/13 Basic Configuration setting for Credit Management | SCN
scn.sap.com/docs/DOC-28086 2/6
Note: if you maintain risk category and credit limit in "default data for automatically creating new customers" , it will
automatically apply for new creating customers in future.

3) Assign Company Code to Credit Control Area:
SPRO --> Enterprise Structure -- > Assignment -- > Financial Accounting -- > Assign Company Code to Credit
Control Area.
Select the Company Code and assign the Credit Control Area to the Company Code.
Save the record.

4) Define Credit Groups:
The credit group specifies which subsequent transaction can be blocked for processing, if the credit limits are
exceeded.
SPRO -- > Sales & Distribution -- > Basic Functions -- > Credit Management and Risk Management -- > Credit
Management -- > Define Credit Groups.
You can use the default credit groups or create new once.

5) Assign Sales Document and Delivery Document to Credit Group:
SPRO -- > Sales & Distribution -- > Basic Functions -- > Credit Management and Risk Management -- > Credit
Management -- > Assign Sales Document and Delivery Document -- > Credit Limit Check for Order Types.

Select the Sales Document Type and assigned to Check Credit, Credit Group. And save the record.

-- Credit Limit Check for Delivery Types.
-- Select Delivery Document Type and assigned to Delivery Credit Group, Goods Issue Credit Group
-- Save the record.
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6) Maintain Credit Limits for Customer:
Logistics -- > Sales & Distribution -- > Credit Management -- > Master Data -- > FD32- Change.
-- Specify the Customer for whom the credit limits has to be maintained
-- Specify the credit control area of the customer.
-- Select all the views and enter.

a) In the overview screen , from the main menu select Go to -- > Control Area Data -- > Status.


Now you have to give value Credit Limit, Risk Category, Last/ Next Interval Review

Note : for only Dynamic check maintain "Credit horizon date" field

b) From the main menu select Go to -- > Control Area Data -- > Payment History.
On this view the system display the payment history of the customer, provided we check the field Payment History
Recorded in the corresponding customer master.

c) From the main menu select Go to -- > General Data -- > Central Data.

1/20/13 Basic Configuration setting for Credit Management | SCN
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Here we have to specify the Maximum Permitted Credit Limits and Save the record.

7) Automatic Credit Control:
During the sales document processing, if the credits are exceeded, the system can automatically block the required
transaction for this we need to configure automatic credit control.
SPRO -- > Sales & Distribution -- > Basic Functions -- > Credit Management and Risk Management -- > Credit
Management -- > Define automatic credit control.
We need to define automatic credit control in the combinations of Credit Control Area, Risk Category and Credit
Group.

Note : 1) you can maintain seasonal discount by specifying "credit limit seasonal factor " tab.
2) in checks tab maintain you want to go for static or dynamic check.
3) specify the system reaction if credit limit is exceeded by "Reaction " check box
a) No massage
b) Warning massage
c) Error massage
4) you can block the order/deliver/pgi by specifying "Status/block" field
5) for dynamic control maintain "Horizon" value
6) for static select " open orders""open delivery`s"
Save the Automatic Credit Control Area.
Note: For the system to carry out the credit limit check during the sales document processing, the following settings
must be done.
1. 1) In the definition of corresponding sales document type, we must not specify the value No Credit Limit Check
for the field Check Credit Limit.
1/20/13 Basic Configuration setting for Credit Management | SCN
scn.sap.com/docs/DOC-28086 5/6
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Products: SAP ERP Sales and Distribution Topics: Enterprise Resource Planning
2. 2) In the definition of corresponding item category, we must check the field Credit Active.
Hope you like my explanation..
Regards,
Patchala.
4953 Views Tags: dynamic, credit_management, static
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15 Comments
Like (3)
Narendra Konnipati May 15, 2012 10:08 AM
Hi patchala, your Document is very nice

Thank you foe sharing this

Naren
Like (0)
. patchala May 15, 2012 10:09 PM (in response to Narendra Konnipati)
Thank you naren ....

Regards,
patchala
Like (0)
NITIN PARAB Dec 5, 2012 1:52 PM (in response to . patchala)
Hi Patchala, your Document is very good.

I have some query about credit management.
1.What is the significance of Risk Category.
2.Will it be possible to bifurcate credit limit into customerwise and product
groupwise
e.g. I want to give credit limit for particular customer of Rs.100000/-
I want to give 15 days credit for A class product and 30 days for B class and 45
days for C class. But the total credit should not exceed particular customer limit
i.e.100000/-

Will it be possible to configure this with credit management.
3. In one invoice line itemwise payment term will be possible?

Thanks if you can give some details.

regards
Nitin
Like (1)
Sridhar *** May 15, 2012 11:18 PM
Well Done Patchala... Good work.
Like (0)
. patchala May 16, 2012 11:33 AM (in response to Sridhar ***)
Thank you sridhar...
Like (0)
Venkat Reddy May 15, 2012 11:46 PM
Nice one..
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Like (0)
. patchala May 16, 2012 11:33 AM (in response to Venkat Reddy)
Thank you Venkat..
Like (0)
BOJJA SIVASANKAR REDDY May 16, 2012 5:53 AM
hi patchala,
its good and nice post , keep it up

regards
reddy
Like (0)
. patchala May 16, 2012 11:32 AM (in response to BOJJA SIVASANKAR REDDY)
Thank you bojja.
Like (0)
Phoebe Hu Jun 7, 2012 10:13 AM
Thanks for your sharing.
Like (2)
Navaneetha Krishnan Oct 3, 2012 8:13 AM
Hi Patchala,
Good content and clear screen shots for the subject you have written. No wonder a write up on credit
mngt is coming back as a popular content. There is no dearth of content to be written on Credit
management, one of the most effective of the processes to streamline the Order Management /
Delivery processes and you have incited people to be aware of the basics of the process and
inspired some to build further extension of this.

It could have been wholesome if you had also run some transactions and demonstrate how the
transactions have worked and some OSS notes on this. I think there is also a note which explains
about the configurations, obviously without screen shots.

Thanks for your effort.
Like (0)
PRAVIN KOTADIA Nov 3, 2012 5:14 AM
well done
Like (0)
Ambarish Dhatingan Nov 6, 2012 12:33 PM
Gr8 useful doc ...
Like (0)
Pasca Satria Dwi Wibisono Nov 13, 2012 11:19 AM
good and very usefully
Like (0)
Basis SAPSupport Dec 17, 2012 6:42 AM
good job