Difference Between Static and Dynamic Credit Check

Tell me the difference between Static and Dynamic Credit Checks. What is the difference between the Open Order Value used in Static check and the one used in Dynamic Check? *Simple Credit Check :* Tr.Code - FD32 It Considers the Doc.Value + Open Items. Doc.Value : Sales Order Has been saved but not delivered Open Item : Sales Order has been saved , Delivered, Billed & Transfered to FI, but not received the payment from the customer. *Static Credit Check* it checks all these doc value & check with the credit limit 1) Open Doc.Value / Sales Order Value : Which is save but not delievered 2) Open Delivery Doc.Value : Which is delivered but not billed 3) Open Billing Doc.Value : Which is billed but not po sted to FI 4) Open Item : Which is transfered to FI but not received from the customer. *Dynamic Credit Check* 1) Open Doc 2) Open Delivery 3) Open Billing 4) Open Items 5) Horizon Period = Eg.3Months

Here the System will not consider the above 1, 2, 3 & 4 values for the lost 3 month

SAP SD Credit Management Tcodes

All business have their own credit management needs, SAP allows you to 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 cyc le the system carries out these checks. SM30 - Table/View
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V_TVTW - Define Distribution Channel V_TVTA_KKB - Assign sales area to credit control area V_T014 - FI - Define Credit Control Area

T001CM - FI - Assign Permitted Credit Control Area to company code

OVXG - Set up Sales Areas e.g. Sales Organization Distribution Channel Division Distribution Channel Division FD32 - Customer Credit Management OVAK - Define credit limit check by sales document type
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Check Credit o A - Credit limit check and warning message o B - Credit limit check and error message (no sales order can be created) o C - Credit limit check and delivery block (block delivery if hit credit limit)  Options B and C -> used for checking open order values (when you create/change the sales order) o D - Automatic credit control with open order values  More control in transaction OVA8 - Automatic credit control  You check for open orders and deliveries, or ju st open deliveries.  or open order values with other options Credit group o Allows you to combine different sales document types for the credit limit check

VKM1 - Blocked SD Documents - Finance have to released the delivery block OVAD - Define credit limit check by delivery order
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whether the automatic credit check occurs at the time of delivery creation and/or goods issue

OVA7 - Define credit limit check by item category

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Set whether to include/exclude item category for credit limit check

OVA6 - Define credit group. You can groups together different business transactions which should be dealt with in the same manner with regard to the credit check.

You enter the credit groups when you configure the sales document types for credit management and define the (D - automatic credit check).
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SAP default credit groups o 01 - credit group for sales order o 02 - credit group for delivery o 03 - credit group for goods issue

OVA8 - Automatic credit control - Double click on the line items You can have the followings credit limit check :y

Static Depends on the customer total value of open orders, deliveries, billing documents and open items.

Open items No of days open Overdue open items checks is based on the ratio of open items that a re overdue by a certain number of days. Max open items % The customer balance must not exceed a certain percentage. Oldest open items If you don't want to deliver to the customer at all when even only 1 invoice is overdue. Tick the Check for Oldest Open Item and Set the field Days oldest item = 1. Days oldest item No of days allowed for overdue or payment terms. Use of the credit check Oldest Open Item. If a user attempts to alter the order quantity of a released sales document that was previously blocked, it would be reblocked again by the system. The system only reblocks the sales document if the new order quantity is above a certain % amount.

Released documents are still unchecked The preset % is whatever you want to set it as when configuring your automatic credit processing. You enter a deviation % and number of days,eg, you can set it so that an order can be changed by up to 10% within 30 days of original order entry date without it going back on credit block. Next Review Date If a customer has a credit limit of 1000 USD, and you would like to restrict this credit limit only to be available in current month (say March). If the document day is in April then the credit limit is zero. You can use the "NextReview date" and "Number of days" fields and combined it with the "Last int.review" field in customer credit master "Status" view (FD32).

VOKR - Display of work list for credit management (configure the display variant

SAP SD, PP, CO, FI, PM, MM, PS, QM, SM, HR, BW, APO, Basis, ABAP/4, Certification, Books Useful SAP Credit Management program RVKRED06 - Background jobs for checking blocked credit management. If an order is no longer outside the horizon as defined in the dynamic credit check, (i.e. it is INSIDE the horizon) it can cause existing "good" orders to block. If you run this job every night, if you have your horizon set for 1 month it can cause a lot of blocks at beginning of month. Try to use 'W' for weekly horizon status. RFDKLI10 - Customers With Missing Credit Data RFDKLI20 - Reset Credit Limit for Customers RVKRED77 - Reorganize SD credit data When updating errors occur, it enables you to reorganize the open credit, delivery and billing document values. RVKRED08 - Checking sales documents which reach the credit horizon You should runs this report periodically, usually at the start of a period. The report

checks all the sales documents, which reach the dynamic credit check horizon. The period for the date of the next credit check is proposed from the current date, with the help of the period split for open sales order values.

Step By Step and What is Credit Limit Check

By Allabaqsh Follow these steps: 1. Go to IMG - enterprise structure - definition - financial accounting - define credit control area. 2. Assignment of company code to credit control area & sales area to credit control area. 3. Go to OVAK select ur sales document type and in the check credit column choose from A B or C. D is for automatic credit control for which you have to maintain the credit group and risk categories. 4. In FD32 you select your customer and click on STATUS icon and press enter. here u maintain the credit amount allowed. but this is done by the Finance people. 5. Now when you create the sales order and if the amount exceeds the credit limit then u will get the message as you maintained in the TC OVAK. Normally the system starts doing credit checks from the second sales. order.

What are the different types of credit checks? By Sunilmadho Credit Check can be : 1) Simple Credit Check 2) Automatic Credit Control Automatic Credit Control can be at various levels : 1) Order 2) Delivery 3) Goods Issue Automatic Credit Check is of many types : 1) Static 2) Dynamic

3) MaximumDocument Value 4) Maximum Open Items in percentage 5) Oldest Open Item in number of days 6) Crtitical fields change 7) Highest dunning level, etc. You can create more. Credit Check happens only in SD module, never in FI. Because the stage of the check is in the sales cycle, which exists in SD. FI guys will check the credit master sheets of the customer, the MIS, the analysis etc, review the credit limit s of customers. But the check will happen only in SD, while creating order, delivery or doing the goods issue.

IMG Settings for SAP FI Credit Management

Explain credit control area and why do we create them. The Credit Control Area is an organizational unit that represents an area responsible for granting and monitoring credit. Credit information can be made available per customer within a credit control area. One will use one credit control area that is four characters JHEN. All of the available functionality for credit management will not be used since a service has already been provided. Stopping the billing process is not an option Organizational unit in an organization that specifies and checks credit limits for customers. A credit control area can include one or more company codes. It is not possible to assign a company code to more than one credit control areas. Credit and risk management takes place in the credit control area. 4.6x OB45 - Maintain Credit Control Area A company code can be assigned to one credit control area. However, a credit control area can be assigned to more than one company code. OB38 - Assign Company Code to Credit Control Area. If your company have different business area, you can assign each with a Credit Control Area. e.g. 0001 for BA-A, 0002 for BA-B, 0003 for BA-C etc. In this case, the same customer master code can have different credit limits for the different Business Area. OB01 - Define Credit Risk Categories. OB02 - Define Account Clerk Groups

OB51 - Define Credit Representatives OB39 - Define Intervals for Days in Arrears for Credit Management

Explain the dunning process used in credit management. Let me explain in simple terms: 1) You have a Customer which you had felt, he is doing good business and supplied material on Credit of 45 days. 2) Since this customer is good as you felt, you have not managed Credit Checks as well. So, he had comfortably reached to the fullest credit (or even more) which you can afford for any customer. 3) One fine day you got realised that, there is very bad debt with this customer and need to recover from him and till then, there will be no further supply to the customer. 4) Your company's legal department has laid a policy that, inorder to recover any bad debts, like: a) We will send a normal payment reminder. b) In case customer doesn t respond, we will send at least further reminder (dunning notice) may be 9 times (9 reminders) (Du nning level) and what intervals of time (dunning frequency). c) Still if the customer doesn't respond for the reminders, you will file a law suit against the customer for recovering the Payments. d) Finally, after getting verdict, you may proceed for auction of his property or as per the order for Law. Now in SAP, the definition of Dunning procedure is a pre -defined procedure specifying how customers or vendors are dunned. For each procedure, the user defines: - Number of dunning levels

- Dunning frequency - Amount limits - Texts for the dunning notices In SAP, you will maintain the Dunning Procedure at customer master. Referring to this, your SD Team / FI Team (user team) will effect Dunning.

Credit Management
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Added by Rajesh Banka, last edited by Prashanth Goud on Jun 30, 2007 (view change) Those who are reading this article, pls have a look at OSS note 18613 too. How To Do Configuration For Credit Management Credit and risk management takes place in the credit control area. According to your corporate requirements, you can implemen t credit management that is centralized, decentralized, or somewhere in between. An organizational unit that represents the area where customer credit is awarded and monitored. This organizational unit can either be a single

or several company codes, if credit control is performed across several company codes. One credit control area contains credit control information for each customer. For example, if your credit management is centralized, you can define one credit control area for all of your company codes. If, on the other hand, your credit policy requires decentralized credit management, you can define credit control areas for each company code or each group of company codes. Credit limits and credit exposure are managed at both credit control area and customer level. You set up credit control areas and other data

related to credit management in Customizing for Financial Accounting. The implementation guide is under Enterprise Structure -> Definition or Assignment -> Financial Accounting and then Maintain credit control area. You assign customers to specific credit control areas and spec ify the appropriate credit limits in the customer master record. Settings for determining the credit control area of a document. The settings of items 1 - 4 are taken into account according to their priority. The credit control area found is stored in field VBAK-KKBER. 1. Transaction OB38 Check which credit control area is assigned to the company code. Company code: Credit control area: 2. Transaction OVFL Check which credit control area is assigned to the sales area. Sales area: Credit control area:

3. Transaction XD02 or VD02 Check which credit control area is assigned to the payer. Payer: Credit control area: 4. Transaction SE37 Is user exit EXIT_SAPV45K_001 being used? 5. Transaction OBZK For the settings under items 2 - 4, field "All company codes" must be marked in Transaction OB45, or the credit control area must be entered under the relevant company code in table T001CM of the credit control areas allowed. Company code: Credit control areas allowed: 6. Settings for the credit checks 7. Transaction OVAK Which settings do exist for the sales document type used? Sales document: Check credit: Credit group: 8. Transaction OVAD Which settings do exist for the delivery type used? Delivery type: Credit group for delivery: Credit group for goods issue: 9. Transaction OB01 Credit management/Change risk category Definition of the risk category for each credit control area. This risk category can be assigned to a credit account by using Transaction FD32. 10. Transaction OVA8 Here, the individual credit checks for key fields o credit control area o risk category o credit group are set. Take these key fields from the above settings and go to the detail screen. In particular, check whether fields "Reaction" and "Status/block" are set correctly. To carry out follow-up actions in case of a credit block, the credit check status must be set (field "Status/block"). 11. Transaction FD32

Credit master data for the payer of the relevant document. Credit account: Credit limit: Risk category: Currency: 12. Settings for updating the credit values Update of the credit values is required for the limit check (static or dynamic credit limit check). 13. Transaction OVA7 Update of the credit value is active for the corresponding item type if the check box is marked. This field corresponds to field "Active receivable" in Transaction VOV7. Item type: Active receivable: 14. Transaction V/08, Pricing In the pricing procedure used for pricing, subtotal "A" must be entered in a line for determining the credit value (mark the pricing procedure and doubleclick on "Control"). Usually, the net value plus taxes is used. This way the system is determined to use this subtotal for credit pricing. The credit price is stored in field VBAP-CMPRE and used for update and credit check. You can find the used pricing procedure of the order under "Item -> Condition -> Analysis". Pricing procedure: Line with subtotal = 'A': 15. Transaction OB45 Which update group (field "Update") do you use in the relevant credit control area? The default setting is "12". If you use another update group, check whether this is fine with you. If you open an OSS message, please tell us the alternative update group. Credit control area: Update: 16. Transaction OMO1 Which kind of update did you choose for structure S066? In any case, "Synchronous update (1)" has to be cho sen as the kind of update. All other settings will lead to errors.