4th Week Trainig Session

7/15/2019 4th Week Trainig Session

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SAP Credit Management

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Table of Contents

What is Credit Management ?

Types of Credit Management

Simple Credit Check

Dynamic Credit Check

Organizational Structures & Master Data

Customization

Example

What is Credit Management ?

Most enterprises extend credit to their customers. This literally means, selling their goods and

collecting money at a later point of time. The amount of credit extended is determined by the

customers credit worthiness (Also called credit limit ) . The number of days for which credit is

extended is based on the payment terms associated with that transaction.

For ex., Customer A could be given a credit limit of $ 100,000 by the company.
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Now lets say the customer orders goods worth $ 20,000 with payment terms of Net 45 2 % (

Meaning if the customer pays for the goods within 45 days of purchase, he will be given a 2% cash

discount. So instead of paying $20,000, the customer would need to pay ($20,000 2% of 20,000) =

$ 19,600. This is to encourage timely payment of their bills and improve cash flow).

The same customer could also place another order for $ 60,000 and still be within his credit limit.

The value of Order A ( $ 20,000 ) and Order B ( $ 60,000 ) put together is called the credit exposure

of the customer. If the customer places another order for $ 30,000 more, he now exceeds the credit

limit set for him.

So, at the point of ordering (Order C) the customers total receivables ( Value of Order A + Order B )

along with his current order ( Order C ) is checked against this credit limit. Since the customer

exceeds the credit limit set for him, the order would be blocked.

Credit Exposure = Value of all Open Items + Value of the current Order

$ 110,000 = ( $ 20,000 + 60,000 ) + ( $ 30,000 )

This is a very simple example of credit management. In reality, credit management can get pretty

complicated and not all the scenarios will be covered in this document.


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Types of Credit ManagementTypes of credit checks:

1. Simple credit check2. Automatic Credit check1. Static Credit Check2. Dynamic Credit Check

Simple Credit CheckThis is very similar to the example we have discussed earlier. Simple credit check compares the

Customers credit limit to the total of all the items in the order and the value of all open items.

Credit Exposure in Simple Credit Check = Value of all Open Items + Value of the Current Sales

Order.

Open items are orders that have been invoiced to the customer but the payment for the invoiceshave not been received yet. The system can be configured to either block the delivery, send a

warning or an error message when the credit exposure has exceeded the credit limit of the

customer.

Dynamic Credit CheckSimple Credit Check alone is not sufficient for most businesses. Instead of just considering open

items only, there is a need to consider existing open orders and open deliveries as well. Also, for old

and seasoned customers, even if the credit exposure exceeds the credit limit set for the customer,

the order can still be processed because of the good payment history with the company.

However, for new customers credit needs to be strictly monitored. For the purpose of Credit

Management, SAP allows us to recategorize customers into different Risk Categories. Some

examples of risk categories could be Medium Risk, High Risk, Low Risk etc.

Dynamic Credit Management can be broadly divided into 2 components.

Static Credit Check Open Deliveries + Open Invoices + Open Items

Dynamic Credit

Check

Open Sales Order Value with a Time period ( Called

Time Horizon )

Horizon:

The use of time horizon can be best explained with an example. Most orders for the holiday season

are pre-ordered because of the holiday rush. Orders might start to pile in as early as June, July. The

delivery however is to be done in November or December.


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For example, in August , Order A for $ 50,000 is a Pre-Ordered to be delivered in November.

Similarly for the month of December, another order, Order B is placed for $ 40,000 to be delivered in

December.

In case of static credit check, the credit exposure is already $ 90,000. If a regular order is placed in

August for another $ 30,000 the credit exposure would exceed the credit limit of $ 100,000.

However, in case of dynamic credit check, a horizon of say 2 months would be used to exclude all

orders for which the delivery has to be beyond the stipulated horizon.

So, order C would not be blocked in case of dynamic credit check.

Organizational Structures & Master DataMonitoring Credit during SD ProcessingThe master data for those customers whose credit we wish to monitor is created in SD.We

determine how high a customers credit limit is to be when creating this data.

Credit Control Area

An organizational unit that represents the area where customer credit is specified and

monitored.Credit Management takes place in the Credit Control Area.A Credit Control Area can

include one or more company codes.It is not possible to divide a company code into several Credit

Control Areas.

Path: IMG -> Enterprise Structure -> Assignment -> Financial Accounting -> Assign Company

Code to Credit Control Area.


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CustomizationCustomization Settings for Credit Management in SD

1. 1. Define Credit GroupsCredit Group groups together different business transactions which should be dealt with, in the same

manner with regard to credit check.We enter Credit Groups when we configure the Sales documenttypes for Credit Management.

The following credit groups are contained in the standard SAP R/3 system:

01 = credit group for sales order

02 = credit group for deliveries

1. credit group for goods issue

1. 2. Set Sales Documents and Delivery Documents for credit managementWe can specify in Customizing when,at the point of Order, Delivery or Goods Issue a check on the

customers credit limit is to take place.We can specify the Sales document and Delivery document

types for which a credit check should be carried out.We can also specify if Credit check can occur at

the time of Goods Issue.

We can specify the system response if credit check is set.The system can respond in the following

ways:

- Warning Message

The document can be saved.

- Error Message


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The document cannot be saved.

- Setting a Delivery Block

The document can be saved, but a delivery block is automatically set.

1. 3. Set Sales and Distribution document items for credit managementWe can specify for each item category whether credit check is to be carried out.

Path: IMG -> Sales and Distribution -> Basic Functions -> Credit Management/Risk

management-> Credit Management/Risk management Settings -> Determine ActiveReceivables Per Item Category.

1. 4. Define type and scope of credit checkso Simple Credit check

A credit limit check can be carried out when sales documents are created or changed.The check is

carried out within one credit control area. Simple credit check compares the Customers credit limit

to the total of all the items in the order and the value of all open items.

o Automatic Credit checkThe automatic credit check can target certain aspects during a check and run at different times

during order processing.

We can determine an automatic credit check for any combination of the following:


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- Credit Control Area

- Risk Category of the Customer

- Credit group

Path: IMG -> Sales and Distribution -> Basic Functions -> Credit Management/Risk

management -> Credit Manageemnt -> Define Automatic Credit Control.

ExampleNow lets see an example, by creating 3 Sales orders.

Check the Credit Limit for the Customer.

Transaction Code: FD32


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Here the Credit limit is set at 1,000,000 and the credit exposure is currently 0.

Now lets start creating the orders.

Transaction Code: VA01

Order Value 1: 200.000,00

Create a second Order.

Order value 2: 600.000,00

The credit exposure now is 800,000 ( 200,000 + 600,000 )


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Create a third order.

Order value 3: 300.000,00

We get the following error message when we create the Order, because the total of the net

document value and the open items value has exceeded the credit limit of the customer.

o Share this:ooo

23 Responses to SAP Credit Management

1.Deitz44November 14, 2012 at 5:28 pm#

What is the order of consumption of credit? What does it consider first in determining the available

credit? (open items, special liabilities or sales values)

REPLY

2.JuanOctober 17, 2012 at 8:58 pm#

This is a crazy question. When considering open items in the credit exposure, can purchase orders

(paid or not) to the same customer (as a vendor from this point of view) be included to net in favor as

a financial document would do?

Thanks.
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REPLY

3.BikashOctober 10, 2012 at 1:01 pm#

its really a nice one

REPLY

4.sharmilaAugust 24, 2012 at 5:39 am#

It is very helpful for refreshing about the topic in a single glance.

Thanks.

SharmilaREPLY

5.SUNILAugust 16, 2012 at 9:17 am#

Nice Explanation.

REPLY

6.SUNILAugust 16, 2012 at 9:16 am#

Very helpful info.

REPLY

7.shleeJune 6, 2012 at 7:44 am#

Very helpful and thanks!

REPLY

8.Sai LakshmiMay 15, 2012 at 2:28 pm#
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Very good to understand the concepts for a beginners levelgreat job siva.

A suggestion: Would be really thankful if you can cover special scenarios and some common errors

that we come across during configuration.

Thanks once again!REPLY

9.JoshJanuary 12, 2012 at 7:54 am#

Hi all

pls clarify how do i allow a customer creating Deliveries even though he has over dues

REPLY

10.BelindaJanuary 9, 2012 at 3:20 am#

Is there any way to credit check only RV document type?

REPLY

osiva

January 9, 2012 at 10:21 am#

Yes. The simplest answer is to create a separate credit group for the doc type and assign it to

automatic credit management.

REPLY

11.RaulNovember 22, 2011 at 12:22 pm#

Good work! Really appreciable.

REPLY

12.SAKNovember 4, 2011 at 2:12 am#
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Siva,

I understand that a Company Code can have only one Credit Control Area assigned. In that case,

why is it necessary to assign a Credit Control Area to a Sales Area? By definition, the Sales Area

includes the Sales Org., which can be assigned only to a single Company Code.

In other words,For example, lets say a Company Code has 10 different Sales Areas under it. Once I assign a

Credit Control Area to the Company Code, why would it be necessary to again assign Credit Control

Area to these Sales Areas individually?

Kindly clarify. Thanks.

REPLY

osivaNovember 4, 2011 at 12:38 pm#

Good question. Dont have an answer as of now . Lets brainstorm this in the class.

REPLY

ShyamNovember 15, 2011 at 12:01 pm#

Hi Sir,

From the Sales Order system comes toknow that which sales area this order belongs to and from

that sales area it comes to know that which sale Org. this

order belongs to, from that Sales org. it come to which

Co. code the order belongs to and finaly from that Company

code it comes to know this order belongs to which CCAr. So

as to finally find the customer credit limit for that CCAr

and compare the Sales order value with that Credit limit.

Pls correct me if im wrong..

REPLY

sivaNovember 15, 2011 at 12:12 pm#

Remember the short cut ? ( Sales org is assigned to Credit Control Area ) ??
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REPLY

13.justinSeptember 22, 2011 at 12:59 am#

hi siva

Just a clarification in yesterday class you mentioned simple and automatic credit management .

in the notes it is given simple and dynamic ,and dynamic is again sub-dived into static and dynamic .

IS it a Automatic or dynamic!!

thanks

justin

REPLY

osivaOctober 24, 2011 at 9:53 am#

Types of Credit Management

1. Simple Credit management

2. Automatic Credit Management

2.1 Static Credit Management

2.2 Dynamic Credit Management

REPLY

14.sivaprasadAugust 9, 2011 at 5:41 am#

Very nice and simple presentation to understand credit management and especially clarity on

horizon period.

REPLY

15.V N RaoAugust 6, 2011 at 11:42 am#

Very simple and systematic presentation of configuration steps. You did a wonderful job.

REPLY
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16.Niraj SinghJuly 28, 2011 at 8:01 am#

its really helpfull

Thanks siva

REPLY

17.yashJune 11, 2011 at 5:23 am#

etremely helpful for beginers

things are explained in a very simple and precise manner

REPLY

osivaJune 12, 2011 at 5:46 am#

Thanks hash

SAP Credit Management SAP Training March 2011

batchBY SIVA ON MARCH 22, 2011 INSAP SD TRAINING,SAP TRAINING

In todays SAP Training class, we have discussed SAP Credit Management, its different

configuration options and here are some exercises to solve to understand those concepts better.

Sap credit management sap training sap sd trainingView morepresentationsfromMagna TrainingQuestion 1. Create a new Customer ( of SAP Customer Account Group - 001 ) in the sales area ofyour choice. Specify the SAP Customer NumberQuestion 2. Find out the SAP Credit Control Area that is associated with the Customers

Organizational StructureQuestion 3. Assign a Credit limit of 1,00,000 to the customer created in Q.1 above.Question 4. Create a new SAP Sales Document Type ( as a copy of standard order type OR ifpossible ) and give the document type -Z019Question 5. Set the Credit Management to the document type you created in Q.4 to Simple CreditCheck. What are the different options available in Simple Credit Check ?Question 6. Create a Sales Order for the Document type ( Created in Q.4 ) and the Customer (
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Created in Q.1 ) for a material ( say M-01 ) for a value of 30,000. Specify the SAP Order NumberQuestion 7. What is the Credit Exposure for the Customer ?Question 8. What percentage of the credit limit is used ?Question 9. Create another order for the same customer and Order type Only this time, create theorder with a value of around 90,000 ( It does not need to be exactly 80,000 ). What is the System

Response ? Did the credit limit warning come up ?Question 10. What is the credit exposure for the Customer now ?Question 11. What percentage of the credit limit is used now ?Question 12. Explain why the credit limit is not exceeded for Q.9 above even though the order valuein Q.6 and Q.9 together exceeded the Credit Limit set by you in Q.3 ?Question 13. This time create another order for the same customer and Order type Only this time,create the order with a value of around 1,20,000 ( It does not need to be exactly 1,20,000 ). What isthe System Response ? Did the credit limit warning come up ?Question 14. Explain in your own words difference between the system response for Q.9 vs Q.13 ?Question 15. Delivery and Bill the Order you have created in Q.6. Make sure the Accounts are

being posted to.Question 16. Check the total receivables for the Customer. What is the value ?Question 17. After performing Q.15 above, what is the new effective Credit limit for the Customer ?Addendum 1 :The following is advanced SAP Credit Management Exercises that talks about Automatic CreditManagement. This exercise should only be done after completing the SAP Simple CreditManagement Exercises listed above.

Hint : If you get confused in the middle, always start with a new customer, set a credit limit to a fixed

value say 100,000 and start the transactions from scratch. This eases the pain of understanding

SAP Credit Management configuration a bit.

Question 18. Repeat Q.1 through Q.4 specified in and specify the answers.Question 19. Create a new SAP Credit Group Zx and assign it to the new SAP Sales Document

Type configuration you have created in Q.18

Question 20. This time set the Credit Management settings to Automatic

Question 21. Create a new Risk Category ( How to create a new Risk Category in SAP ? ) say Zxx

and assign it to the Credit Control area you have chosen in Q.18 above.

Question 22. What are the 3 parameters used to determine Automatic Credit Control in SAP ?

Question 23. Specify the Automatic Credit Management settings to Static and spec ify the system

reaction to Warning in case the limit exceeds. What configuration have you done to effect this ?

Question 24. Set the scenario in Q.23 to block the order in case of credit overageQuestion 25. Create the following Sales Orders with the Customer and Order type you have crated

in Q.18

-> Order 1 30,000 Value


What is the system reaction to the second order ? How is this different from SAP credit Management

Reaction in Q.9 above ?


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Question 26. Release the order from credit block for Order # 2 in Q.25 above. ( How to release an

SAP Sales Order from Credit Block )

Addendum 2 :

The following exercise in on SAP Automatic Credit Management with Dynamic Credit Horizon. Its a

little tricky especially with testing it and understanding the Dynamic Credit Horizon.

Hint :Please try not to do all the questions in this post the same day especially Addendum 2. We

are not responsible if you pull your hair out

Question 27. Create another Customer, a new Risk Category . Specify the same.

Question 28. For the data in Q.27, set the Credit limit to100,000, apply the newly created Risk

Category to the Customer.

Question 29. In Automatic Credit Management, specify the configuration for the corresponding

Credit Control Area, Risk Category and Credit Group as follows

-Dynamic Credit Management with Warning as the system response

-the order should be blocked for credit in case the credit limit exceeds.

-The SAP Dynamic Credit horizon should be 2 months.

Specify the configuration you have done for the same.

** Watch ou t Here comes the tr icky p art **

Question 30. Create a new Sale order for a value of 50,000, set the delivery date 4 months out into

the future. Specify the SAP Sales Order and the delivery date

Question 31. Create another Sales Order for a value of 50,000, set the delivery date 5 months out

into the future. Specify the SAP Sales Order and the delivery date.Question 32. Create another sales Order for a value of 30,000 do NOT change the SAP system

proposed delivery date. Specify the SAP Sales Order

Question 33. Specify the Credit Exposure for this customer and explain in your own words why it is

so ?

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1.satyaFebruary 28, 2012 at 1:22 am#

1. Customer Number 100260

2. 3600

3. In FD32 assigned the credit limit to 100.000 EUR.

4. ZST

5. Set to Credit Check = c, got an error message that there is no need of credit group for simple

credit check so removed the credit group.

6. Order no is 14044

7. Credit exposure is 3150000

8. Exceeded by 20,000 Eur, about 15%

9. Order no is 14046

10. Exceeded 30.000,00 EUR

13. Order no is 14052, exceeded by 10.000,00 EUR, and with that warning message it got saved.

14. In both the orders got warning messages, that there is excess amount of credit.

15. Getting an error message that Sales order is blocked for delivery: Credit limits

REPLY

2.IlanaFebruary 25, 2012 at 12:38 am#

1.customer 842. 3600

3. assigned

4. ZIL

5. set to simple

6. 14031

7. 9,449

8. 47.25%

9. 14,032

10. still the same amount 9,44911. the same 47,25%

13. 14033

16. del 80016503

Issue: I was not able to complete PGI and billing.

REPLY
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3.RonaldoFebruary 24, 2012 at 6:42 pm#

Question 1- Create a new Customer (of SAP Customer Account Group 0001) in the sales area of

your choice. Specify the SAP Customer Number

Answer: Customer 79 created in 1000/10/00 with 0001(Customer Account Group)

Question 2- Find out the SAP Credit Control Area that is associated with the Customers

Organizational Structure

Answer: SOrg =1000 Credit control Area = 3600

Question 3- Assign a Credit limit of 100,000.00 to the customer created in Q.1 above.

Answer: I set the customers credit limit to 100,000.00 USD using FD32 for customer 79/credit controlarea 3600.

Question 4 Create a new SAP Sales Document Type (as a copy of standard order type OR if

possible) and give the document type -Z019

Answer: I created Sales document Type ZO88 as acopy of OR using VOV8

-

Question 5. Set the Credit Management to the document type you created in Q.4 to Simple Credit

Check. What are the different options available in Simple Credit Check?

Answer: Set the credit check on ZO88 to option A (simple credit check with warning message). The

following other credit options are available in simple credit check.

B. Run simple credit check error message.

C. Run simple credit check Delivery block

-

Question 6.-Create a Sales Order for the Document type (Created in Q.4) and the Customer

(Created in Q.1) for a material (say M-01) for a value of 30,000. Specify the SAP Order Number

Answer: Order created 14014 with above requirements.

-

Question 7 What is the Credit Exposure for the Customer?

Answer: 30,000 Euro

Question 8.-What percentage of the credit limit is used?

Answer: 30%

Question 9 Create another order for the same customer and Order type Only this time, create
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the order with a value of around 90,000 (It does not need to be exactly 80,000). What is the System

Response? Did the credit limit warning come up?

Answer: Created another order 14015 without getting any system warning message, that means

simple credit check is not checking any open and unbilled order value, its check only current order

value against credit limit value.Question 10. What is the credit exposure for the Customer now?

Answer: Credit exposure- 120,000 Euro

Question 11. What percentage of the credit limit is used now?

Answer: Credit limit is used now-120%

Question 12. Explain why the credit limit is not exceeded for Q.9 above even though the order value

in Q.6 and Q.9 together exceeded the Credit Limit set by you in Q.3?

Answer: Simple credit check checks only order completed and billed + current order value, its not

checking any open order value without billing.

Ex-1st Order value 30,000 Euro so its less than 100000 Euro credit limit so order created.

Ex- 2nd Order Value 90,000 Euro, still less than 100000 Euro credit limit so again order saved.

Question 13 This time create another order for the same customer and Order type Only this time,

create the order with a value of around 1,20,000 ( It does not need to be exactly 1,20,000 ). What is

the System Response? Did the credit limit warning come up?

Answer: This time system response with warning message The credit limit has been exceeded by

20000 Euro but order saved 14016

-Question 14. Explain in your own words difference between the system responses for Q.9 vs Q.13?

Answer: In 2nd order value which is less than credit limit and there is no outstanding complete order

invoice so system response no warning message while in 3rd order value is more than credit limit so

system response with warning message The credit limit has been exceeded by 20000 Euro

Question 15. Delivery and Bill the Order you have created in Q.6. Make sure the Accounts are being

posted to.

Answer: Delivery 80016492 created and billing invoice- 90038548 created.

Accounting document

Question 16 Check the total receivables for the Customer. What is the value?

Answer: Total receivables for customer 79 30,000 Euro

Question 17 after performing Q.15 above, what is the new effective Credit limit for the Customer?

Answer: New credit limit for customer 79 is 70,000 Euro


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REPLY

4.RonaldoFebruary 24, 2012 at 3:49 pm#

Siva

Can you please check the order 14029 and tell me why am I getting the message The accounting

document has not yet been created on the billing?

Thanks.

REPLY

osivaFebruary 27, 2012 at 5:39 am#

The customer 51 used in the order 14029 does NOT have the corresponding Company Code

view defined. If you do not define the company code view in the customer master, the

associated reconciliation account will be missing. Hence, the invoice could not be posted. The

way I found it out is as follows.

I opened the invoice in change mode ( VF02 ) and tried to post the invoice to accounts by

clicking on the Green Flag as shown in the class. The error message that I got

wasScreenshot is Copyright of SAP AG. All rights reserved.

Then I checked out if the customer master had Company code data and it did NOT have.

REPLY

5.
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MahshFebruary 24, 2012 at 12:15 am#

Siva,

I have created Customer 80

There are two orders 14018 and 14019 are created

Del 80016493, 80016494

After deliveries I am getting errors while doing PGI or trying to create Billing.

Please clarify whats wrong.

Thanks

REPLY

6.

jiteshJanuary 22, 2012 at 6:40 pm#

Question 1. Create a new Customer ( of SAP Customer Account Group 001 ) in the sales area of


Answer: Customer created ; 15(1000/10/00)

Question 2. Find out the SAP Credit Control Area that is associated with the Customers


Answer: CCar: 1000 in enterprise structure under assignment> Financial accounting

Question 3. Assign a Credit limit of 1,00,000 to the customer created in Q.1 above.Answer: used T code FD32: assigned 100000 to customer 15

Question 4. Create a new SAP Sales Document Type ( as a copy of standard order type OR if

possible ) and give the document type -Z019

Answer: created new YOR7.


Check. What are the different options available in Simple Credit Check ?

Answer: Set option B for doc type YOR7

Options: no credit management

A: Simple credit management with warning

B: Simple credit management with error message

C: Simple credit management and delivery block

D: automatic Credit Mnagament
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Question 6. Create a Sales Order for the Document type ( Created in Q.4 ) and the Customer (

Created in Q.1 ) for a material ( say M-01 ) for a value of 30,000. Specify the SAP Order Number

Answer; YOR7 (13358)

Question 7. What is the Credit Exposure for the Customer ?

Answer: 30000 (EUR)

Question 8. What percentage of the credit limit is used ?

Answer: 30%

Question 9. Create another order for the same customer and Order type Only this time, create the

order with a value of around 90,000 ( It does not need to be exactly 80,000 ). What is the System

Response ? Did the credit limit warning come up ?

Answer: No


in Q.6 and Q.9 together exceeded the Credit Limit set by you in Q.3 ?Answer: Because in Simple Credit Management: credit Exposure: = Current order value+ open item

In Order1 and order 2 We created order for EUR 30000 and 90000 respectively but we didnt

delivered it or billed it and not posted to account. so order 1 and order 2 has been gone through

without warning. If we have billed order 1 and also posted to account then we would not able to

create order 2.

This is a kind of flaw in simple credit management

Question 13. This time create another order for the same customer and Order type Only this time,


the System Response ? Did the credit limit warning come up ?

answer: Error message of credit limit is exceeded by xxxxxxx

Question 14. Explain in your own words difference between the system response for Q.9 vs Q.13 ?

Answer: Because in Simple Credit Management: credit Exposure: = Current order value+ open item

In Order1 and order 2 We created order for EUR 30000 and 90000 respectively but we didnt

delivered it or billed it and not posted to account. so order 1 and order 2 has been gone through

without warning. If we have billed order 1 and also posted to account then we would not able to

create order 2.

This is a kind of flaw in simple credit management


posted to.

Answer: delivery: 80016242


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Billing: 90038039

accounting: 1400000007

Question 16. Check the total receivables for the Customer. What is the value ?

answer: 58500

Question 17. After performing Q.15 above, what is the new effective Credit limit for the Customer ?Answer: 40500

Addendum 1 :

The following is advanced SAP Credit Management Exercises that talks about Automatic Credit

Management. This exercise should only be done after completing the SAP Simple Credit

Management Exercises listed above.

Hint : If you get confused in the middle, always start with a new customer, set a credit limit to a fixed



Question 18. Repeat Q.1 through Q.4 specified in and specify the answers.

Answer: Created new customer: 16

Document type:yor6

FD32: 10000

Question 19. Create a new SAP Credit Group Zx and assign it to the new SAP Sales Document


answer: created new credit group Z1


answer: assign category D to Sales doc type : YOR6 and credit group : Z1



Answer: created New Risk category : Finance>acc receivable> Credit management> Define risk

category: Zj3

Question 22. What are the 3 parameters used to determine Automatic Credit Control in SAP

?(OVA8)

Answer: Credit control Area+ Credit group+ Risk category

Question 23. Specify the Automatic Credit Management settings to Static and specify the system


Answer: Hit T-code : OVA8 , check mark static and then set reaction to C or A and status blocked.

Also assigned risk category in FD32 and check mark block field


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Answer:

Question 24. Set the scenario in Q.23 to block the order in case of credit overage

Question 25. Create the following Sales Orders with the Customer and Order type you have crated

in Q.18

-> Order 1 30,000 Value-> Order 2 80,000 Value

Answer: created order 13363 its gone through. second order 13364 got blocked by issuing error

message.

What is the system reaction to the second order ? How is this different from SAP credit Management

Reaction in Q.9 above ?

Answer: second order didnt go through. System threw a error message saying that it cant be

processed due to credit limit exceed by 5000

Question 26. Release the order from credit block for Order # 2 in Q.25 above. ( How to release anSAP Sales Order from Credit Block )

Answer: VKm3 to release the order from the credit block

Addendum 2 :

The following exercise in on SAP Automatic Credit Management with Dynamic Credit Horizon. Its a

little tricky especially with testing it and understanding the Dynamic Credit Horizon.

Hint : Please try not to do all the questions in this post the same day especially Addendum 2. We

are not responsible if you pull your hair out


Answer: created customer 17, new Risk category ZJ4: moderate risk



Answer: Assigned Zj4 and 100000 under FD32 to customer 17 and Cr control area: 1000






Specify the configuration you have done for the same.

** Watch out Here comes the tricky part **


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Answer: following configuration has been done

Goto OVA8

Checked: dynamic, reaction set to D, Stautu/blocked tiked,Open delivery and open order ticked,

Horizon 2then saved the changes



Answer: Order YOR8 13368 < delivery date: 26/05/2012


into the future. Specify the SAP Sales Order and the delivery date

answer: 13368/Yor8. delivery date: 22/06/2012

.Question 32. Create another sales Order for a value of 30,000 do NOT change the SAP system


Answer:13369/yor8, delivery date: 01/02/2012


so ?

answer: Credit exposure for the customer is EUR 30000

Dynamic credit management = Open order+ open delivery+ Open billing+ Open item+ current order

value+ horizonhere horizon is for 2 months so any order beyond 2 month wont be considered . so first two orders

are meant to deliver far out in future(4 & 5 months). it wont be considered in Dynamic credit

management. Only order for 30000 eur would have been considered.

REPLY

7.Murali KotikalapoodiJanuary 21, 2012 at 6:55 am#

Question 1: Customer numberAns: 100232 in sales area 1000 with CCode 1000 created

Question 2. Find out the SAP Credit Control Area that is associated with the Customers


Ans: Credit Control area for CCode 1000 is 1000
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Question 3. Assign a Credit limit of 1,00,000 to the customer created in Q.1 above.

Ans: Credit Limit 100000 is set



Ans: Z0CM is created



Ans: Have three options Selected B

A Run Simple credit check and warning message

B Run Simple credit limit check and error message

C Run simple credit limit check and delivery block


Created in Q.1 ) for a material ( say M-01 ) for a value of 30,000. Specify the SAP Order NumberAns: Order # 15637 is created for 30,000 EUR


Ans: 30,000


Ans: 30%




Ans: No It created an order # 13658 for a value of 82,500 was accepted.

Question 10. What is the credit exposure for the Customer now ?

Ans: The Credit exposure of the customer is 112,500

Question 11. What percentage of the credit limit is used now ?

Ans: 112.5 %


in Q.6 and Q.9 together exceeded the Credit Limit set by you in Q.3 ?

Simple credit limit only checks the credit limit when the combined value of open items and the

current order is above the credit limit. Here there is no open items as no delivery and no invoice was

generate and sent to A/C hence the credit limit was never checked.





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Ans: Yes the credit limit error came up saying that this order exceeded the limit by 12,500 and order

did not go through.


Ans: In Q9 the sum of open items and current orders did not exceed the credit limit and hence the

order went through. Here in Q13 the current order exceeded the credit limit and hence order did notgo through. Also I have selected the simple credit check to B which means there will be an error and

hence the order did not go through.


posted to.

********Ans: Not able to Deliver as some issue with the scheduled lines.***********

Question 16. Check the total receivables for the Customer. What is the value ?

Question 17. After performing Q.15 above, what is the new effective Credit limit for the Customer ?

REPLY

8.Mital ShahDecember 28, 2011 at 4:07 am#

Question 1- Create a new Customer (of SAP Customer Account Group 0001) in the sales area of


Answer: Customer 9902 created in 1000/10/00 with 0001(Customer Account Group)

Question 2- Find out the SAP Credit Control Area that is associated with the Customers

Organizational StructureIMG -> Enterprise Structure -> Assignment -> Financial Accounting -> Assign Company Code to

Credit Control Area

IMG -> Enterprise Structure -> Assignment -> Sales & Distribution -> Assign Sales Area to Credit

Control Area

Answer: Credit control Area = 1000 and organizational structure =1000

Question 3- Assign a Credit limit of 1, 00,000 to the customer created in Q.1 above.

Answer: I set the customers credit limit to 100,000.00 EUR using FD32 for customer 9901/credit

control area 1000.

Question 4 Create a new SAP Sales Document Type (as a copy of standard order type OR if

possible) and give the document type -Z019

Answer: I created Sales document Type ZO17 as a copy of OR using VOV8


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Check. What are the different options available in Simple Credit Check?

Answer: Set the credit check on ZO17 to option A (simple credit check with warning message). The

following other credit options are available in simple credit check.

B. Run simple credit check error message.C. Run simple credit check Delivery block

Question 6.-Create a Sales Order for the Document type (Created in Q.4) and the Customer

(Created in Q.1) for a material (say M-01) for a value of 30,000. Specify the SAP Order Number

Answer: Order created 13376 with above requirements.

Question 7 What is the Credit Exposure for the Customer?

Answer: 30,000 Euro

Question 8.-What percentage of the credit limit is used?Answer: 30%

Question 9 Create another order for the same customer and Order type Only this time, create

the order with a value of around 90,000 (It does not need to be exactly 80,000). What is the System

Response? Did the credit limit warning come up?

Answer: Created another order 13377 without getting any system warning message, that means

simple credit check is not checking any open and unbilled order value, its check only current order

value against credit limit value.

Question 10. What is the credit exposure for the Customer now?

Answer: Credit exposure- 120,000 Euro

Question 11. What percentage of the credit limit is used now?

Answer: Credit limit is used now-120%


in Q.6 and Q.9 together exceeded the Credit Limit set by you in Q.3?

Answer: Simple credit check checks only order completed and billed + current order value, its not

checking any open order value without billing.

Ex-1st Order value 30,000 Euro so its less than 100000 Euro credit limit so order created.

Ex- 2nd Order Value 90,000 Euro, still less than 100000 Euro credit limit so again order saved.

Question 13 This time create another order for the same customer and Order type Only this time,


the System Response? Did the credit limit warning come up?


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Answer: This time system response with warning message The credit limit has been exceeded by

20000 Euro but order saved 13378

Question 14. Explain in your own words difference between the system responses for Q.9 vs Q.13?

Answer: In 2nd order value which is less than credit limit and there is no outstanding complete orderinvoice so system response no warning message while in 3rd order value is more than credit limit so

system response with warning message The credit limit has been exceeded by 20000 Euro


posted to.

Answer: Delivery 80016240 created and billing invoice- 90038086 created.

Accounting document 1400000003

Question 16 Check the total receivables for the Customer. What is the value?

Answer: Total receivables for customer 9901- 30,000 EuroQuestion 17 after performing Q.15 above, what is the new effective Credit limit for the Customer?

Answer: New credit limit for customer 9901 is 70,000 Euro

Addendum 1:

The following is advanced SAP Credit Management Exercises that talks about Automatic Credit

Management. This exercise should only be done after completing the SAP Simple Credit

Management Exercises listed above.

Hint: If you get confused in the middle, always start with a new customer, set a credit limit to a fixed



Question 18 Repeat Q.1 through Q.4 specified in and specify the answers.

Answer: 9903 created in 1000/10/00 with 0001(Customer Account Group)

Credit control Area = 1000 and organizational structure =1000,

I set the customers credit limit to 100,000.00 EUR using FD32 for customer 9903/credit control area

1000.

I created Sales document Type ZO18 as a copy of OR using VOV8

Question 19 Create a new SAP Credit Group Zx and assign it to the new SAP Sales Document Type

configuration you have created in Q.18

Answer: Go to SPRO-imageSales and Distribution-basic functions-credit management/riskmanagement/credit management/define credit groups

Created new credit group Z8.

I assigned credit group Z8 to sales order document Z018 using VOV8.

Question 20 This time set the Credit Management settings to Automatic

Answer: Set to Automatic= D the credit management in ZO16


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Answer: Path: SPRO-image-finance accounting-account receivable and account payable- credit

management-credit control account-define risk categories

Created new credit risk group ZMS and assigned to credit control area 1000.Question 22. What are the 3 parameters used to determine Automatic Credit Control in SAP?

Answer: Credit control area, risk category and credit group


reaction to Warning in case the limit exceeds. What configuration have you done to affect this?

Answer: Go to: IMG Sales and Distribution Basic Functions Credit Management/Risk

management Credit Management Define Automatic Credit Control.

I added an automatic credit control for Low Risk sales mit (credit control area 1000, risk category

ZMS, and document credit group Z8). I set the check type to static, the reactionA (warning),

check open orders = yes, check open deliveries = yes.Question 24. Set the scenario in Q.23 to block the order in case of credit overage

Answer: Go to: IMG Sales and Distribution Basic Functions Credit Management/Risk

management Credit Management Define Automatic Credit Control.

In (Low risk Sales Mit) Credit control area 1000, risk cat. ZMS, Doc. Credit grp. Z8-Set

status/block= yes

Question 25. Create the following Sales Orders with the Customer and Order type you have crated

in Q.18


-> Order 2 80,000 ValueWhat is the system reaction to the second order? How is this different from SAP credit Management

Reaction in Q.9 above?

Answer: 1st Order- 13382 and 2nd order- 13384 created.

Question 26. Release the order from credit block for Order # 2 in Q.25 above. ( How to release an


Answer: Go to VKM3 and release order 13384.

REPLY

9.zaheerDecember 25, 2011 at 8:56 pm#

Hi Siva, Please check if answers are correct.

Exe: Credit management


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Question 1. Create a new Customer ( of SAP Customer Account Group 001 ) in the sales area of


Answer: Created customer # 29991 with account group 0001

Question 2. Find out the SAP Credit Control Area that is associated with the CustomersOrganizational Structure

Answer: Credit control area associated with the customer organizational structure is 1000(Credit

control area Europe)

Question 3. Assign a Credit limit of 1,00,000 to the customer created in Q.1 above

Answer: credit limit set to 100,000 for customer #29991



Asnwer: Document type z019 created from doc type or



Answer: I have set simple credit check A to the doc z019

Options available for simple check are

Blank: No credit limit check

A: Run Simple credit limit check and warning message

B: Run Simple credit limit check and error messageC: Run Simple credit limit check and delivery block

D: credit management automatic credit control


Created in Q.1 ) for a material ( say M-01 ) for a value of 30,000. Specify the SAP Order Number

Answer: Order created # 13338 with material quantity 35*859=30,065


Answer: Credit exposure consist is 30,065.


Answer:30.065% of the credit limit is used





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Answer: another order with order #13339 worth 89336 created but still there is no warning of credit

limit.

Question 10. What is the credit exposure for the Customer now ?

Answer: the credit exposure of the customer is still 119.401.Question 11. What percentage of the credit limit is used now ?

Answer: 119,40% of the credit limit is used.


in Q.6 and Q.9 together exceeded the Credit Limit set by you in Q.3 ?

Answer: Credit limit is not exceeding because there are no open items in the system and current

order values were also under the limit of allotted credit limit for the customer. In simple credit

management system doesnt count the value of open orders it only counts current order+ open

items.




Answer: Yes warning came up because the current orders value is exceeding the allotted credit limit

of the customer.


Answer: In both of the scenarios there were no open items available so the system only consideredvalue of the current order, in Q13 Value of the current order was under the credit limit so the system

didnt show any warning but in question 13 value of the current order was exceeding the credit limit

so system had issued warning message.


posted to.

Answer: made delivery and billing of order number 13338, Delivery number 0080016232 and billing

number 0090038080, value of the document is 30,065

Question 16. Check the total receivables for the Customer. What is the value ?Answer: The total receivable in the accounting document is 30,065

Question 17. After performing Q.15 above, what is the new effective Credit limit for the Customer ?

Answer: The new effective credit limit is 100,000 30,065 = 69935


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Addendum 1

Question 18. Repeat Q.1 through Q.4 specified in and specify the answers.

Answers 1: Answer: Created customer # 29992 with account group 0001

Answer 2: Credit control area associated with the customer organizational structure is 1000(Creditcontrol area Europe)

Answer 3: credit limit set to 100,000 for customer #29992

Asnwer4: Document type z020 created from doc type or

Question 19. Create a new SAP Credit Group Zx and assign it to the new SAP Sales Document


Answer: Credit group zx created and assigned it to sales doc z020


Answer: Set credit management setting to D(Automatic)



Answer: High risk category assigned to credit control area 1000 with credit group zx

Question 22. What are the 3 parameters used to determine Automatic Credit Control in SAP ?

Answer: Credit group, Credit control area and risk category determine automatic credit control in

SAP.



Answer: For setting automatic credit management to Static SPROIMGSales and Distribution

Basic FunctionDefine automatic credit control Checked the static button and chosen A (warning)

as a reaction

Question 24. Set the scenario in Q.23 to block the order in case of credit overage

Answer: I have checked the Status/Block option to block the order in case of credit overage

Question 25. Create the following Sales Orders with the Customer and Order type you have cratedin Q.18



Answer:

I have assigned risk category to the customer from transaction fd32 and created


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Order 13345 with value 30065 and saved the order. Customers credit limit is 30% used.

I tried to create another order 13346 with value 80,000 but this time I got static credit check credit

limit exceeding message, the order is blocked for delivery. This scenario is different than Q 9,

because now system is using automatic static check and considering open orders as well when

checking customers credit limit.Question 26. Release the order from credit block for Order # 2 in Q.25 above. ( How to release an


Answer: I have released the sales document from credit check using VMK3 Transaction

Addendum 2 :




Answer: Created new customer 29993 and credit category zs1 and assigned it to customer control

area.






Specify the configuration you have done for the same

Answer: In Automatic credit management I have created a new entry and assigned newly created

risk category zs1 to the credit control area. I have enabled the check for dynamic credit management

and status block for blocking order in case the limit exceeds. I have entered 2 month in the horizon

field as well.



Answer: Order number 13347 created for value 50,000 with delivery date 01-05-2012


into the future. Specify the SAP Sales Order and the delivery date.

Answer: Order Number 13348 created for value 49822 and delivery date 01.06.2012

Question 32. Create another sales Order for a value of 30,000 do NOT change the SAP system



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Answer: Created order number 13349 for value 30,065 on systems default date 05-01-2012 and

saved it.


so ?

System exposure is only 30,065 and the value of previous two orders is not included in it because

dynamic credit check is enabled and the horizon is set to 2 months. System is intelligently handling

credit management in such a way that company is not losing current business opportunity because

of deliveries which are due after 2 months.

How to remove SAP Sales orders from Credit BlockFeb 2011 SAP Training BatchBY MAGNATRAIN ON MARCH 1, 2011 INSAP TRAINING

When you try to deliver an SAP Sales order that has been blocked for Credit, the system issues an

error message as follows.

If you are a new student undertakingSAP SD Training, you would definitely face this problem. How

do you resolve this?

Solution: Use Transaction code [ VKM3 ] to release orders from credit block.
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For example, specify the order number in the selection screen of VKM3 , and execute the

transaction.

Select the SAP Sales Order in question and click on the release flag. The line selected should

turn green and then click on the save button.


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The system will show a message displaying the SAP Sales Order that has been released.

For more onSAP Trainingin other modules likeSAP FICO Training,SAP CRM TrainingandSAP

HR Training, please visit our website.

SAP SD Pricing Fundamentals

Fundamentals of SAP SD PricingRelated Trainings

SAP Access

SAP Training

SAP SD Training

ConceptsPricing is one of the core concepts in SAP SD and all SD consultants need to know pricing. Just asthe name says, SAP SD Pricing is configuring the system to effectively determine the price of a

product under different circumstances. The most easiest example to explore pricing is to take a

simple grocery bill and expand on it.
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Consider this as an extract of a grocery bill. You have purchased some items from the Produce

section and some from the stationery section. Your Produce sub-total is 18.00 and your stationery

sub-total is 10.00. You have been taxed 10% and your total comes to 27.00 as shown in the picture

above.

Lets just explore on how the pricing is calculated on line item No. 10 Milk. However, they might not

be shown on the bill but are internal to the company selling the product. Lets explore how a potential

bill could be created. As you can see from the picture below, there is a Base Price from the price list

5.00 . And since the bill is for a retail customer , there is a retail discount of 1.00. So the sub-total

for the line item 10 is 4.00.

Condition Type :

The types of calculation ( whether its a price, discount or a tax calculation, and in price if its a retail

price or a wholesale price or a variant price etc ) are called condition type. Normally, condition types


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of a particular kind are not cumulative Meaning if there are more than 1 Pricing condition type, they

dont add up instead the last pricing condition type is taken by the system. There are some

exceptions to this however. For example when pricing a car, its the sum of the different pricing

condition types that gives you the Price. They are called variant condition types.

RequirementA requirement is a piece of code that calculates if a particular condition type should be evaluated or

not. This is not necessarily the only way to check if. However, since this involves hard-coding the

logic in the system, this functionality should be used sparingly.

For example, the following piece of code says, If the item is not relevant for pricing do not price it.

Functional consultants should be aware of the final result SY-SUBRC. SUBRC stands for SUB

Routine Return Code. Typically in SAP, a return code of 0 signifies a success. Otherwise its a

failure.

* Pricing is turned on in item category configuration (TVAP)

For more details, visit us atSAP TrainingandSAP Access

* Pricing is turned on in item category configuration (TVAP)
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form kobed_002.

sy-subrc = 4.

if komp-kposn ne 0.

check: komp-prsfd ca BX.

check: komp-kznep = space.

endif.

sy-subrc = 0.

endform.

* Prestep

form kobev_002.

sy-subrc = 0.

endform.

Similarly, the following picture shows a simple requirement. There are 2 types of discount conditiontypes Retail and Wholesale. If the customer is retail, then apply that discount. If the customer is

wholesale, then apply the other discount. So the actual total depends on who the Orders customer

is. The same can be achieved using many different ways, but this is sure one hard-coded way to do

it.


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Sub-TotalA sub-total as the name implies holds temporary totals before the final price is calculated. As shown

in the picture below, the Gross price is a sub-total that results from the base price. The Net Price is a

sub-total that is arrived at subtracting the Discount percentage off of the Gross Price. There aremany additional steps that might be required to arrive at the final price. For example, if the item is

taxable, should the tax be applied on the Gross Price or the Net Price..? That actually depends on

the business scenario. However, the Sub-totals allow for easily identifying and computing values for

further use.


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Alternative Calculation TypeThe value 5.00 for the Base Price ( shown in the picture above ) is derived based on condition

records which we will see much further in the discussion. However, if the condition type should NOT

be calculated based on a condition record, but should be calculated based on an external or internal

logic, then an alternative calculation routine should be used. Each alternative calculation routine is a

3 digit number between 1 and 999 that contains a piece of code that does some calculation either

internally or externally and returns a value. That value will be used to calculate the condition type as

opposed to a condition record. A simple example for the same is US Taxes. Taxes in the US and

Canada are based on Jurisdiction code. There are around 50000+ jurisdiction codes in the US alone

( Based on all possible variations of City, County, State and District ). And they change continuously.

So it is not practical for companies to keep track of the changes in tax rates. There are external tax

companies ( Called Tax Vendors ) that only does this. So it is wiser for companies to just cal

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