Gardahn In more and more industries an efficient returns management is required over the warehouse management system. Faster processing and higher productivity- User have to interfere rarer in the processes. Function for simplification and acceleration of the transfer from return to repair process: Kit-to-stock, kit-to-order, reverse kitting. Increase of process efficiency sinks total cost of ownership.
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Credit facility is just like telling our customers that they need not pay immediately, they can pay at a future point of time after 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. Key challenge: Reducing credit risk without hampering the supply chain.
Do I block orders from important customers, or do I grab a phone? Can I afford to block customers small customer base? What do I save? What is the cost in terms of damage? Credit Check Every customer is having a certain credit limit, which is measured and maintained by Finance people. Credit check is performed at the following stages of Sales order cycle, Credit check settings present in each SD document is responsible for interacting with FI module.
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 the order is delivered, the open delivery value is added to exposure. 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.
It represents the area where customer credit limits are specified and monitored. Depending on the relationship between credit control area and company code, the credit management can be categorized as: Decentralized credit management 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.
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.
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.
For high volume and very low risk customers e. Risk Category , it is good practice to put deliveries on block and leave the orders untouched. This prevents a level of check. Recommended Use: If the business is always likely to have fast moving items leaving no chances of Open Orders, Open Deliveries etc for long time period, this is good to use. There can be other business considerations to include only Open items within certain period Maximum Document Value 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. Date of Next Review System uses the date of the next credit review as a trigger for an automatic credit check. Overdue Open Items The relation between open items which are more than a certain number of days overdue and the customer balance may not exceed a certain percentage.
These values are defined in the customizing for automatic credit control. The values may be reduced with increase in risk category values. Oldest Open Item The oldest open item may not be more than a specified number of days overdue. User-Defined Checks- For e. Cheque received from a customer bounced, then subsequent orders may get blocked. Credit Management at work For each customer, credit limits are specified in the particular credit master record. If the customer exists in multiple credit control areas, individual limit can be specified for each credit control area.
In addition, a central credit limit can also be specified for all the credit control areas under which the customer exists. Then, the total of the credit limits for each credit control area should not exceed the central credit limit. 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.
For the document selected, the following options are available: Grant the credit and release the document Reject the credit and cancel the document Forward the blocked document to another processor Recheck the blocked document Reassign the blocked document and specify a new sequence of documents. This enables to give priority to and release several documents with a low document value until their credit limit is completely used up, instead doing so for a single document with a high document value that has already exceeded its credit limit.
SAP SD - Credit Management
Credit facility is just like telling our customers that they need not pay immediately, they can pay at a future point of time after 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.
KREDITMANAGEMENT SAP PDF
Next Page Credit management deals with selling of goods and collecting money at a later stage. The credit limit for a customer depends on the payment method and customer payment history. The payment for the goods is based on payment conditions based on the business transaction. Why do we need Credit Management? Credit management allows you to reduce the credit risk by setting up the credit limit for the customers. You can get warning alerts for a customer or a group of customers.