For many members and consultants, having knowledge and implementing credit management into a company have many options and requirements. Customer concerns about that and sometimes make many dicussion, take many time. Let we make it more clearly and easier to apply it.
About organization structure, we can apply centralize or decentralize management. Centralize means you create a credit control area and assign to several company code. In this case, a customer might buy in several company code but we give them the total amount of credit. Decentralize means you create many credit control area and assign one credit control area to one company code. In this case, credit amount will give to each customer in each credit control area. Depend on specific requirement of a company, we make the choice: centralize or decentralize.
SAP provide two kind of credit check: simple check and dynamic check. For simple check, that’s so “simple”, therefore, below will discuss deeply about dynamic credit check.
Credit check has two types: base on value (credit limit) and base on time (oldest item overdue). Base on value, you put the amount to FD32, create the FI document…Base on time, that depend on Payment term on each transaction. With this one, the user might order you set (1)- a duration like after 30 days from billing or (2) – fix date like 25th every month. You can have option to choose one of two above option or both.
Where to check credit? There are two places: sales order and delivery order. Some company want to check credit limit from sales order, means the value = credit amount + payment + other incoming payment – open billing – open DO – open SO. In some company, quantity in SO is very huge, because one SO can delivery many time. If that, the SO might be exceed credit limit and must be release. For instance, quantity in SO is 100.000 TO and they want pick up 5 times. If they order 80.000, that’s ok, but if they order 100.000 TO, credit exceed and must be release to continue. Besides that, in case of cancellation document, ex: they find that there is a mistake and they must cancel document from Billing to SO. If they check credit at SO level, that means they must cancel billing, cancel DO, change DO quantity and SO quantity. If not, the SO still open and will count to credit limit. That’s some reason that company want to check credit limit at DO level. Theo value = credit amount + payment + other incoming payment – open billing – open DO. Depend on the management of each company can choose different way, and consult them is consultant job.
Hint: there are three hints for you when check the credit limit. Firstly, remember that, apply SAP will bring real time update. Each time you action in SAP for the document, the system will update the credit limit. You can check overdue in Tcode FBL5N and amount in FD32. You might face with situation that, when you create the DO, the credit limit is ok, but after goods issue, the credit limit have message that it is exceed. That’s a normal case because of the update in the system. If you want to check, you can go to check change of the document (log of history) and you will see the system action. Secondly, because the system check credit real time, therefore, if in 2nd May, you create a document (ex: outbound delivery) there are no document overdue but in 5th May, a FI document have been overdue. At that time, the customer come and pick up the goods and you execute the DO you created at 2nd May. Credit check management will be executed and this DO will be blocked. The last but not the least, remember to reject the order, or change quantity in DO/ SO if you don’t use it anymore, because its value will be count and bring to credit amount.
ERP’s customer always pays attention to credit check, because this related to sales dept, financial dept and their customer. In SAP, this function not only base function of SD, but it integrates with FI module. For SAP user, this function have involve by two departments. The clearer you know it, the less unnecessary discussion between modules and use departments.