Risk Mgmnt COnfiguration steps

[Former Member]

Hello Friends

Can anyone please tell me the complete steps to configure "Risk Management " with LoC (Letter of Credit) & what is the necessary data to be collected from the business, for configuring the same.

Regards

Sumanth.Gururaj

[Former Member]

Hi,

The configuration steps for risk management

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 implement 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 specify 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 chosen as the kind of update. All other settings will lead to errors.

Credit Management Reports

The following table provides an overview of all the reports that are available for credit management:

Program Function

RFDKLI10 Customers with Missing Credit Data

Checks whether the data regarding credit limits is complete and issues relevant error lists. These enable you to maintain the relevant definitions either manually or with batch input.

RFDKLI20 Reset Credit Limit for Customers

Resets the credit limit information in the control areas.

RFDKLI30 Credit Limit Overview

Lists the central and control area data for each customer.

RFDKLI40 Credit Overview

Provides a comprehensive overview of the customeru2019s credit situation.

RFDKLI41 Credit Master Sheet

Displays and prints the customer master data for an individual account that is needed for credit management.

RFDKLI42 Early Warning List

Displays and prints customers in Credit Management who have been listed by the credit check as critical.

RFDKLI50 Credit Limit Data Mass Change

Changes all the credit management master data together.

RFDKLIAB Display Changes to Credit Management

Displays the changes to credit management master data for all accounts.

RVKRED06 Check Blocked Credit Documents

Checks all the documents blocked for credit reasons. The report is started in the background and should run after the incoming payments programs.

RVKRED77 Reorganize SD Credit Data

Reorganizes open credit, delivery and billing values. It can be used in the event of an update error, for example.

RVKRED08 Checking sales documents which reach the credit horizon

Rechecks all sales documents that fall within the credit limit horizon of the dynamic credit limit check. The report is run at regular intervals and should be run at the start of each period. The system uses the current date and the period split for the open order values to propose the u2018next credit check dateu2019.

RVKRED09 Check Credit Documentation Background

Checks released documents whose validity period of the release has been exceeded (number of days).

RVKRED88 Simulating Reorganization of SD Credit Data

To run a report:

1. Choose System ® Services ® Reporting.

2. Enter the name of the report.

3. Choose Program ® Execute.

4. Enter your selection criteria.

5. Choose Program ® Execute or Program ® Execute and print.

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 cycle the system carries out these checks.

SM30 - Table/View

u2022 V_TVTW - Define Distribution Channel

u2022 V_TVTA_KKB - Assign sales area to credit control area

u2022 V_T014 - FI - Define Credit Control Area

u2022 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

u2022 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 just open deliveries.

 or open order values with other options

u2022 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

u2022 whether the automatic credit check occurs at the time of delivery creation and/or goods issue

OVA7 - Define credit limit check by item category

u2022 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).

u2022 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 :-

u2022 Static

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

u2022 Open items

No of days open

Overdue open items checks is based on the ratio of open items that are overdue by a certain number of days.

Max open items %

The customer balance must not exceed a certain percentage.

u2022 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.

Dayu2019s oldest item

No of days allowed for overdue or payment terms.

Use of the credit checks Oldest Open Item. If a user attempts to alter the order quantity of a released sales document

that was previously blocked, it would be re-blocked again by the system. The system only re-blocks the sales document if the new order quantity is above a certain % amount.

u2022 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.

u2022 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 date 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)

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 & Transferred to FI, but not received the payment from the customer.

Eg: Customer Credit Limit is Rs.1, 00,000/-

Suppose Doc.Value + Open Item Value is Rs.1,10,000/-

Here credit limit exceeds then system reacts.

Options: A) Warning Message

B) Error Message (Sales Order won't be saved)

C) Error Message with Delivery Block

AUTOMATIC CREDIT CHECK: Give extra credit facilities to the particular customer.

STATIC CREDIT LIMIT DETERMINATION: Checking Group + Risk Category + Credit Control Area.

A) Credit Checking Groups: Types of Checking Groups.

01) Sales

02) Deliveries

03) Goods Issue

At all the above 3 levels orders can be blocked.

B) Risk Category: Based on the risk Categories Company decides how much credit has to give to the customer.

HIGH RISK (0001) : LOW CREDIT

LOW RISK (0002) : MORE CREDIT

MEDIUM RISK(0003): AVERAGE CREDIT

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 delivered

2) Open Delivery Doc.Value: Which is delivered but not billed

3) Open Billing Doc.Value: Which is billed but not posted to FI

4) Open Item: Which is transferred 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 last 3 months

Then assign the Sales Doc & Del Documents.

Sales Doc.Type(OR) + credit Check (0) + Credit Group (01)

Credit Limit Check for Delivery Type : Del.Type (LF) + Del Credit

Group (02) + Goods Issue Credit Group (03)

User Exits For Credit Checks And Risk Management

Credit Check

I hope this will resolve your issue

Thanks

Anil Hooda

[Former Member]

Hi,

"Risk Management " with LoC (Letter of Credit)

friend your question is a open end question which can be easily answered by you. you can just google and get plenty of SAP help link for the same. please let me know your specific requrement.

this time i can help you but please next time onwards serch first on intenet.

[SAP Risk Management - Letter of Credit Processing |http://help.sap.com/saphelp_gts80/helpdata/en/29/201242b40dca7ee10000000a1550b0/content.htm]

Thnks

Mhn