For example, a representative may be authorized to process credit holds for customers within a particular risk category in which total credit exposure is below 80 percent of the allowed credit limit. For customers whose credit exposure is approaching 100 percent of their credit limits (in other words, becoming potentially critical), you may want to direct credit holds to senior credit personnel as shown in Figure 1.

Figure 1

An example of authorization according to credit limit

In another example, a group of representatives may be authorized to process credit holds for documents whose value is less than 500,000 USD. However, only the group’s manager can authorize credit for documents with values of over 500,000 USD as shown in Figure 2.

Figure 2

Example of authorization according to document value

In Credit Management/Risk Management, basic customizations are necessary. I focus on customizing based specifically in Credit Management/Risk Management Settings > Maintain Authorizations within SD.

Prerequisites

There are two prerequisites to complete customizing in Credit Management/Risk Management Settings > Maintain Authorizations:

• Define the credit control area. The credit control area is an organizational unit that specifies and checks a credit limit for customers. Settings are in the SAP Financial Accounting (FI) module.
• Define the automatic credit control. Settings are in the SD module. The automatic credit check can target certain aspects during a check and run at different times during order processing. In this activity, you can define your own credit checks to correspond to your requirements in the area of Credit Management.

Configuration for Advanced Strategies in SD Credit Management

To configure advanced authorization strategies in credit, you need to complete these steps in customizing:

1. Define document value classes
2. Assign document value classes to the credit control areas
3. Create a role

Step 1. Define document value classes. Document value classes provide a means of assigning sales order and SD documents depending on their document value. In customizing for SD credit management, you create document value classes and assign maximum release values to these classes.

My example has three values for sales documents: Low, Medium, and High, as shown in Table 1.

To define the document classes, follow customizing menu path SPRO > Sales and Distribution > Basic Functions > Credit Management/Risk Management > Credit Management/Risk Management Settings > Maintain Authorizations > Define Document Value Classes.

To document value classes according to your requirements, enter a three-character alphanumeric key in the DVC (document value class) column. Enter a textual description in the Document value class fields (Figure 3).

Figure 3

Insert document value classes

To create records, click the New Entries button. Enter a name in the DVC field (e.g., Z01) and an amount in the Document value class field.

Step 2. Assign document value classes. In this customizing activity, you assign document value classes to the credit control areas. Follow menu path SPRO > Sales and Distribution > Basic Functions > Credit Management/Risk Management > Credit Management/Risk Management Settings > Maintain Authorizations > Assign Document Value Classes.

In the initial screen (not shown), click the New Entries button. This action displays the screen shown in Figure 4. Enter a credit control area in the CCAr column. Allocate a credit value in the field in the Credit value column. Enter a relevant currency in the Crcy column. Allocate a document value class using the limits shown in Table 1.

Figure 4

Assign document value classes

In my example, I deposit three records based on the segments that I want to divide in the authorizations of credit based on the value of the sales document (Figure 4).

Step 3. Create a role. A role is used to create an authorization profile. After this, you can assign the role to users. Follow menu path SAP menu > Tools > Administration > User Maintenance > Role Administration > PFCG – Roles.

I create three roles for the administration of credit management in sales documents. The roles will be associated with document value classes. For example, create the roles shown in Table 2 using transaction code PFCG.

Enter the role name and description as shown in Figure 5.

Figure 5

Create a single role

Enter the first name and click the Single Role button to open the Create Roles screen (Figure 6).

Figure 6

Create a description of the role

This action opens a pop-up screen (not shown) that asks you if you want to save the role now. You must save the role to continue to make changes in the role, so click the Yes button to save the role.

Click the Menu tab (Figure 7) and click the Transaction  button. This action opens the Assign transactions screen (not shown) in which you enter a code in the field under the Transaction code column and then press the Enter key. For my example, enter transaction code VKM1 (Blocked SD Documents). (This transaction is used to release sales orders blocked by credit management). 

Figure 7

Click the Transaction button to display the Assign transaction screen

Figure 8

Change authorization data

After you click the Change Authorization Data button, the system displays a  pop-up screen (not shown) that  asks you if you want to save the role now. You must first save the role to continue to make changes in the role, so click the Yes button to save the role.

After you save the role, a window appears in which you enter the credit control area that is configured in credit management (Figure 9). For my example, enter ACVI. Click the Full authorization button.

Figure 9

Insert the credit control area

These yellow authorization object values correspond to risk category, credit representative group, document value class, and credit limit used in percent (Figure 10).

Figure 10

Nodes in yellow require incorporation of data values

Figure 11

Select available values

You then can select one of the available values such as (Low) 0 - 100,000 USD.

The Credit limit used in the % authorization object enables you to use the authorizations to define the maximum percentage of the credit limit used by a credit customer that allows your users to release documents. To enter values, click the pencil icon beside the authorization object named Credit limit used in %. This allows you to enter specific values. The window of available values appears. For my example I enter 0 in the field under the ‘From’ column and 80 in the field under the ‘To’ column as shown in Figure 12.

Figure 12

Insert credit limit used ‘From’ 0 ‘To’ 80

This step ensures that customers who are within the credit limit of 0 percent to 80 percent are evaluated by that authorization role. Next, you generate the authorization objects. Click the generate icon in Figure 13.

Figure 13

Generate authorizations

In the User tab, enter the users who will have access to this role. Enter the user name in the User ID column and then enter the validity dates for the assignment (Figure 14).

Figure 14

Assign users to the role

The role created is specific to Document Value Class: Z01 Low (0 - 100,000) USD. You repeat the procedure for Z02 and Z03.

The role created is specific to Credit Limit Used From 0 % to 80 %. The organization can create the combinations you require.Table 3 shows one possible example.

Master Data in Credit Management

Credit management in SAP master data is required. You need to create master data that is associated with the client. To create the master data for the customer in Credit Management, follow SAP Easy Access menu path Logistics > Sales and Distribution > Credit Management > Master data > FD32 Customer Credit Management Change.

In the initial screen that appears (Figure 15), enter the customer and credit control area to be associated with this customer in the Customer and Credit Control Area fields, respectively. For example, I use the client code 24421874-1, and associate the credit control area ACVI (credit control area 0001). In the General data section, select the Central data check box. In the Credit control area data section, select the Status check box. Click the save icon (not shown) to save your entries.

Figure 15

Customer Credit Management

Figure 16

Relevant fields to complete

Click the save icon.

In the next screen (Figure 17) enter values and information based on the customer's credit performance. The relevant fields on this screen are:
•    Credit limit: Upper limit for the total receivables
•    Credit limit used: Portion of the credit exposure for the credit limit granted.
•    Risk category: Classification characteristic for customers with regard to the credit risk. The credit risk category controls all credit checks
•    Credit rep.group: A customer can be allocated to a credit representative group for credit control. This credit representative group is copied into the order and can be used as a selection criterion for evaluations and release functions.

Figure 17

Credit limit data and internal data

Other relevant fields (Figure 17) that are read only are:
•     Receivables: total receivables (for credit limit check). Total receivables that are to be taken into consideration when checking the credit limit. This total does not include special G/L transactions such as down payments.
•    Sales value: Total of the sales values for the credit limit check. Total of all order values that have not been transferred to FI, but which are taken into consideration when checking the credit limit.
•    Credit exposure: (for credit limit check): Total of receivables, special G/L transactions relevant to the credit limit and outstanding order value.
•    Sec.Receivables: Total Secured Receivables.

The master data of credit management belonging to the client, in addition to the customizing of Risk category (functionality beyond the scope of this article), determines the characteristics of credit management in the sales documents—for example, the criterion of blocks. The Risk category controls all credit checks.

Blocked SD Documents

When a sales document is not approved by the validations in credit management, the document is locked. To release locked documents, you are required to use transactions, such as transaction code VKM1 (Blocked SD Documents), which I use in my example.
 
Execute transaction code VKM1 or by follow SAP Easy Access menu path SAP menu > Logistics > Sales and Distribution > Credit Management > Exceptions > Blocked SD documents. This action displays the Blocked SD Documents screen (Figure 18). In this screen, you can use different selection fields, such as Credit control area, Credit representative group, Credit account, and Risk category (Figure 18).

Figure 18

Selection fields in the Blocked SD Documents screen

Figure 19

A blocked sales document

If you click the Reject button, you can enter a reason for rejecting the sales document. If you click the Reassign button, you can reassign the document to another Group Credit Management.

The Blocked SD Documents report has fields that allow you to verify the value of the document (the Net Value column and the DCV Document value class column) depending on the configuration performed when you maintained credit authorizations.

The following reports have similar characteristics to those in the VKM1 report:
•    VKM2 (Released SD Documents): Documents were released in credit management.
•    VKM3 (Sales Documents): Blocked sales order documents  released in credit management.

Diony J. Ruiz R.

Diony J. Ruiz R. is an SAP architect and senior consultant at Group Intellego. He has 12 years’ experience in SAP Sales and Distribution and SCE (Supply Chain Execution), Logistic Execution (LE), transportation, and warehouse management picking. He has additional knowledge in SAP MM (Materials Management).

He has worked in industries such as manufacturing, pharmaceuticals, logistics, third-party logistics distribution, services, public government, chemical, maritime and customs, metallurgy, automotive, and mining industries.

His roles have included SAP Consultant Specialist, Project Leader, and Area Leader.

He is an SAP Certified Professional.

 

You may contact the author at dionyruiz@gmail.com.

If you have comments about this article or publication, or would like to submit an article idea, please contact the editor.