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Link between credit management and payment terms?

Hi All,

Using credit management i am cleared the two open items posted for the SO using f-28.

Then when i create the same Sale order its giving standard error

" credit : Maximum percentage for open items exceeded"

I think that in configuration of OVA8 its giving problem :

Can you pl explain on link between credit management and payment terms???

Regards,

Asirvad.

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5 Answers

  • Posted on May 27, 2013 at 10:57 AM

    Dear

    Please check following things.

    1. Is this automatic credit control or simple credit control TCode OVAK
    2. IF this is automatic credit check then check settings in OVA8
    3. Check credit status of customer in FD33 for company code and credit control area for which you are creating order and cleared invoices.

    Link of payment term and credit check is in OVA8 where you tell the system to check overdue balances and its number of days so I request you to check these things and analyze this. If you still don't get your solution then paste FD33 and OVA8 screens of your system so that I may check in details.

    Thank$

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  • Posted on May 27, 2013 at 11:26 AM

    Dear,

    " credit : Maximum percentage for open items exceeded"

    See below screen shot what you maintained it in OVA8 will lead this effect .

    If you have any doubts please let me know .

    Thanks,

    Naren


    C.JPG (78.8 kB)
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    • Hi Asirvatham,

      As mentioned by few others in this discussions, the credit management has open item setup in the form of "max open items %" and "No of days open".

      To explain this in more business language, if a customer XYZ has payment terms set as 60 days (from the date of billing), and ideally, there should be no pending open items against customer. If customer adheres to the payment terms without fail, then all payments will be paid in 60 days or earlier. Companies still allow certain % of open items to be unpaid considering various factors like price negotiations, disputes, invoice receipt delays etc etc and this is kind of a 'tolerances' to pay the bills with some time delay (above 60 days of payment terms).

      But, if the customer did not even pay within this tolerance, then sales order entry will provide a message that Maximum percentage for open items exceeded (as in your case). This provides an alert to company and they may take necessary action to avoid such overdue payment situation.

      In this manner, the credit managemn setting and actual payment terms are in link.

      regards,

      Vaibhav Kulkarni

  • Posted on May 27, 2013 at 01:54 PM

    Hi Asirvad,

    First check the sales order credit analysis report using the standard SAP report "CHECK_CM" in SE38/SA38 transaction. This will give you the complete analysis of the credit.

    Coming to your issue; As per my understanding system is performing the oldest open items check for the order you created. Below is the standard text what is given by SAP.

    This type of credit check works in conjunction with two values that you specify in the adjacent fields:

    • Maximum % of overdue items in open items
    • Number of days which the open items are overdue

    The proportion of overdue open items (that exceed the specified number of days) in the total of open items should not exceed the percentage specified.

    This is absolutely clear and to make it more simple we can understand this as

    Number of open items which crossed the number of days (mentioned for the odest open items check in OVA8 screen) / the total open items. If this % is greater than Maximum open items % of OVA8 screen system will block the order for credit.

    As per my understanding the link between payment terms and the credit management is the critical fields credit check of the Automatic credit check. If any payment terms/ Fixed value days /additional value days are changed then system will reperform the credit

    Hope this explains.

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  • Posted on May 28, 2013 at 04:44 AM

    Hi Asirvatham,

    If you are using auotmatic credit control (OVA8) you will get this message if you have billing documents created and open for longer period than what you mentioned in the "Oldest open Items and days". You can also see Max.Open Items % or days. Basically, system will check the Invoice due date (based on the payment term agreement with you customer) and if customer has not paid in that period, you can still give some grace period in OVA8 ( If you don't give then due date will be considered) and subsequent sales orders will go for block.

    Please see below screenshot in our current system, which we are using extensively based on Payment terms:

    Regards, Sai Krishna.


    OVA8.GIF (37.4 kB)
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  • author's profile photo Former Member
    Former Member
    Posted on Jun 01, 2013 at 12:09 PM

    pretty sure you have not unchecked the oldest items button in OVA8

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