Executing the main SAP Credit Management Operations

SAP Credit Management - Advanced assists your company in the early identification of risks associated with receivables from business partners and efficiently making credit decisions. Through automatic calculation using preconfigured formulas, the credit controller can efficiently and quickly make informed credit decisions. You can verify the exposure against the current credit limit for the business partner. Additionally, credit limit requests can be processed, and other checks such as the oldest open item, maximum dunning level, or last payment can be carried out.

The business benefits of Advanced Credit Management include reducing the risk of bad debt and focusing on reliable and profitable customers. Moreover, you can easily assess creditworthiness, which accelerates the process of checking a customer's credit limit. It also allows you to enter sales orders and manage blocked orders. Advanced Credit Management calculates ratings, risk classes, and credit limits for both new and existing customers.

When creating a Credit Limit Request, you first use the Manage Credit Limit Requests App to create a new request and initially provide information about the Business Partner and Segment. If you create a credit limit request, the system transfers some master data that exists for the business partner in SAP Credit Management to the credit limit request. This includes the score, risk class, and credit limit. In your new credit limit request, set the business partner and the requested amount (to fulfill, for example, the created sales order). Set the status to New for your request. Other important information for the credit limit request is also the credit segment and the reason for the request. You enter the values in the form and save your entries.

The Credit controller also utilizes the Manage Credit Limit Request app. It can search for cases, with controls for approving or rejecting the request located at the top of the screen. When rejecting a request, a note can be added. When approving, a note can also be added, specifying which credit limit was approved (which may differ from the request) and the validity period of this limit.

Multi-level approval hierarchies with a four-eyes principle can also be established. This can be done using the Manage Credit Management Rules app.

The created Credit Limit Requests for the Business Partner can also be accessed through the Manage Credit Accounts App via the Business Partner's credit profile, from which you can navigate to the details of the Credit Limit Request as well.

To create a Sales Order, we open the Create Sales Documents App and, in the first step, enter the Order Type, Sales Organization, Distribution Channel, and Division.

In the next step, to complete the Sales Order, additional details such as Sold-to Party, Ship-to Party, Customer Reference, Customer Reference Date, Requested Delivery Date, Payment Terms, and information about the ordered goods like Material Number and Quantity are provided. Once all the details are complete, the Sales Order is created and an automatic credit check will be performed.

The figure shows that the sales order failed the credit check. Due to a credit check, sales orders that exceed the credit limit settings are blocked. In this example, the credit check fails because the value of the Sales Order exceeds the credit limit in the credit segments of the business partner.

A credit case is automatically assigned to the credit analyst or the responsible person.

You use the Manage Documented Credit Decisions app to review blocked sales orders and assign a credit analyst or a person responsible for a credit case. The cases displayed are the ones assigned to your user.

You can also search for specific cases by filtering on the credit analyst or the person responsible. You can select the case ID assigned to you as a credit analyst and manually release the case for further processing. The case is then opened in a new window titled "Document with Credit Block," where a detailed overview of the document can be viewed and analyzed.

To reject a credit case, choose the Reject button. While rejecting the case, you enter the Rejection Reason and a rejection note. It is also possible to perform a recheck of the case. If the case should be released, this can be done using the Release button.