Wednesday, 27 April 2016

SAP SD

Credit Management

Purpose

  • Outstanding or Un collectible receivables can spoil the success of the company greatly. 
  • Credit Management enables you to minimize the credit risk yourself by specifying a specific credit limit for your customers. 
  • Thus you can take the financial pulse of a customer or group of customers, identify early warning signs, and enhance your credit-related decision-making. 
  • This is particularly useful if your customers are in financially unstable industries or companies, or if you conduct business with countries that are politically unstable or that employ a restrictive exchange rate policy.

Integration

  • If you are using the Accounts Receivable (FI-AR) component to manage your accounting and an external system for sales processing, Credit Management enables you to issue a credit limit for each customer. 
  • Every time you post an invoice (created in FI-AR), the system then checks whether the invoice amount exceeds the credit limit. 
  • Information functions such as the sales summary or early warning list help you to monitor the customer’s credit situation.
  • If you are using both the Accounts Receivable (FI-AR) component to manage your accounting and the Sales and Distribution (SD) component for sales processing, you can also use Credit Management to issue credit limits for your customers. 
  • You can make settings in Customizing to decide the scope of the check and at what stage in the process (for example, order entry, delivery or goods issue) a credit limit should take place. 
  • General information functions are also available for use with credit checks.

Features

If you are using both the SD and FI-AR components, Credit Management includes the following features:
  • Depending on your credit management needs, you can specify your own automatic credit checks based on a variety of criteria. You can also specify at which critical points in the sales and distribution cycle (for example, order entry, delivery, goods issue) the system carries out these checks.
  • During order processing, the credit representative automatically receives information about a customer’s critical credit situation.
  • Critical credit situations can also be automatically communicated to credit management personnel through internal electronic mail.
  • Your credit representatives are in a position to review the credit situation of a customer quickly and accurately and, according to your credit policy, decide whether or not to extend credit.
  • You can also work with Credit Management in distributed systems; for example if you were using centralized Financial Accounting and decentralized SD on several sales computers.

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