Credit Control Area
Definition
Credit control area is an
organizational unit that represents the area where customer credit is awarded
and monitored. A credit control area contains credit control information for
each customer and provides credit management at this level. This area awards
and monitors credit to customers.
Usage
The credit control area is used
for credit management in the application components Accounts Receivable (FI-AR)
and Sales and Distribution (SD).
The usage of Credit Control
depends on whether credit will be monitored specific to a company code or
across company codes.
In case of centralized credit
management requires assignment of company codes to one credit control area. In
case of decentralized credit management scenario, every company code is
assigned to different credit control area.
Implementation Consideration
Definition
IMG Path: Enterprise Structure
> Definition > Financial Accounting > Define Credit Control Area
Fields involved
Currency
Enter the currency in which credit
should be monitored
Update
The credit update controls when
the values of open sales orders, deliveries, and billing documents are updated.
System comes with Update Group 000012
configured. This group works as below:
Sales order
-
Increases open order value from delivery-relevant schedule lines
Delivery
-
Reduces open order value from delivery-relevant schedule lines
-
Increases open delivery value
Billing document
-
Reduces open delivery value
-
Increases open billing document value
Financial accounting document
-
Reduces open billing document value
-
Increases open items
Apart from above fields, default
values can be defined here for Risk Category, Credit Limit.
Assignment
IMG Path: Enterprise Structure
> Assignment > Financial Accounting > Assign company code to credit
control area
Note
Please discuss with your
Sales & Distribution (SD) consultant for further configurations related to
credit check.
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