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Exercise Introduction
You have decided to implement the Credit Management function in SAP to better manage Accounts Receivable to minimize the risk from customer default while making sure that the impact on sales due to credit blocks is reasonable and minimized.
Some configuration settings have already been made to allow for credit management. Additional settings must be made, along with master data entries to complete the implementation of credit management. We will make those entries for ## Health Express, then check to see that they function.
1. Set Updating for Sales Documents
First, we need to define how different transactions affect what our customer owes us, or the
Total Commitment. To do this, follow the menu path: Tools ZCustomizing ZIMG ZEdit Project Click on
Enterprise Structure ZDefinition ZFinancial Accounting ZDefine Credit Control Area (click on the icon)
Select your credit control area, ##FS, then click on the details icon ( ) to get the following screen:
Enter 000012 for the Update group and K1 for the FiscalYrVariant, then click on the save icon ( ). The update group defines how documents in the sales process change the Total
Commitment. With update group 000012:
• Sales orders
o Increase the open order value • Deliveries
o Reduce the open order value o Increase the open delivery value • Billing documents
o Reduce the open delivery value
o Increase the open billing document value • Financial accounting documents
o Reduce the open billing document value o Increase the open items
Click on the back icon ( ) twice to return to the SAP Reference IMG
( ).
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2. Create Risk Category
The credit risk category will control the credit review process. Different credit risk categories can be created so that different procedures can be used with different groups of customers. To create a risk category, follow the menu path:
Tools ZCustomizing ZIMG ZEdit Project Click on
Financial Accounting ZAccounts Receivable and Accounts Payable ZCredit Management ZCredit Control Account ZDefine Risk Categories ( )
Which will bring up the following screen:
Click on the New Entries icon, which will bring up the following screen: Click on the New Entries icon
Add the entry:
With Automatic Credit Control, the SAP system can be configured to perform credit checks to run at different times during order processing. It is possible to define a system response for each credit check (for example, warning message). In the case of a warning message, a block can be set in the credit status of a document so that further processing cannot continue until the credit problem is corrected.
To configure Automatic Credit Control, follow the menu path:
Tools ZCustomizing ZIMG ZEdit Project Click on
Sales and Distribution ZBasic Functions ZCredit Management/Risk Management
ZCredit Management ZDefine Automatic Credit Control ( ) Which will produce the following screen:
5 Make the following entry:
Enter
CCA RkC CG Credit control
##FS Z## 01 Standard Credit Check
Then click on enter icon ( ). The currency value will change to USD:
To define the Automatic Credit Checking procedures, make the following entries: Enter
CCA RkC CG Credit control
##FS Z## 01 Standard Credit Check
Then click on enter icon
Make the entries shown above, then click on the save icon ( ),then click on the back icon ( ) twice to return to the SAP Reference IMG ( ).
Check Dynamic
Enter Reaction C (warning plus value by which credit limit is exceeded) Check Status/Block (block further processing)
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4. Set Customer Credit Limit
With the configuration of the Automatic Credit Check complete, the credit limit can be
established for ## Health Express. Setting the credit limit for a company involves a change to
Master Data, which is done from the SAP Easy Access menu paths. Click on the back icon
( ) until you reach the SAP Easy Access screen, then follow the menu path:
ZLogistics ZSales and Distribution ZCredit Management ZMaster Data ZChange which will bring up the following screen:
To find customer ## Health Express, click on the customer field, then click on the search icon to call up the following search window:
After entering ## for the search term and clicking on the enter item, you should get a list of customers:
Double-click on ## Health Express to select it, then make the following additional entries: Enter ## for search term,
then click on the enter icon
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Make/confirm the entries shown above, click on the enter icon ( ) and the following screen will appear:
Enter 1000 for Credit limit and Z## for Risk Category, then click on the save icon ( ). The SAP ERP system should now be configured with a credit limit of $1,000 for Health Express. Next, we need to test the configuration. Click on the back icon ( ) until you reach the SAP
Easy Access screen
5. Create Sales Order
To test the credit check, first we will create a sales order that will be within the $1,000 credit limit for ## Health Express. To create the sales order, follow the menu path:
ZLogistics ZSales and Distribution ZSales ZOrder ZCreate which will produce the following screen:
Message notifying us that we have not
maintained a credit limit for ## Health Express, which is why we are in this transaction!
Enter 1000 for Credit limit and
Z## for Risk Category, then
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Make the following entries, then click on the enter icon ( ) and the following screen will appear: Enter: Order Type OR Sales organization ##FS Distribution channel DI Division SB
Enter the information shown above, then click on the enter icon ( ). Next, follow the pull-down menu path Environment→Partner→Display credit account:
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From the Create Sales Order screen, we can check the customer’s credit status:
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6. Review Customer Credit Limit
Now that the sales order has been saved, it should be reflected in the customer’s available credit. To check this, follow the menu path:
ZLogistics ZSales and Distribution ZCredit Management ZMaster Data ZChange which will bring up the following screen:
Confirm the information required for ## Health Express, then click on the enter icon ( ). The revised credit limit data will be displayed:
The customer number for ## Health
Express should be entered as a default
Note that the sales order has used 59% of ## Health Express’s credit limit. Click on the back icon ( ) until you are back at the SAP Easy Access screen.
7. Create Sales Order over the Credit Limit
If ## Health Express orders another 2 cases of NRG-B bars, this should trigger the Automatic Credit Check logic as it would cause ## Health Express to exceed it’s credit limit. To check this, create another sales order as in Step 5. To do this, follow the menu path:
ZLogistics ZSales and Distribution ZSales ZOrder ZCreate Enter the following information:
Then click on the enter icon ( ):
Note impact of sales order on customer’s credit
Order Type OR
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Enter the information shown above and click on the save icon ( ), and the following message will pop-up:
This is a result of the settings we made for Automatic Credit Control in Step 3. We set the reaction to C, which meant that we would get a warning message plus information as to the amount by which the order exceeded the credit limit. Because we specified a warning message, we can save the sales order, but it will be blocked from further processing until the credit limit problem is resolved. If we had specified an error message for the reaction, the order would not be able to be saved. Click on the enter icon ( ) on the message to save the order, then click on the back icon ( ) until you are back at the SAP Easy Access screen.
Note that the amount of credit used has not changed! While we saved a second order for ##
Health Express, it is blocked, and as blocked orders cannot be processed further, the SAP ERP
system does not count them against the customer’s credit limit.
9. Review and Release the Blocked Sales Order
Usually an important task in credit management is to review all blocked orders and decide how they should be handled. In a reasonably large company, this might be a task performed every few hours.
To review the blocked sales order, follow the menu path:
ZLogistics ZSales and Distribution ZCredit Management ZExceptions ZBlocked
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Make sure that at least ##FS is entered for the Credit control area, then click on the execute icon ( ). This will produce the following report:
We will release this sales order for further processing. To do this, select the order by clicking the check box, then click on the release icon ( ), then click on the save icon ( ). This will
produce the following message:
Credit control area ##FS and the account number for ## Health Express should be entered by default. Only ##FS is required to find the blocked sales order.
Click on the execute icon to list the blocked sales order
Use the back icon ( ) until you are back at the SAP Easy Access screen, then recheck the credit limit using the menu path:
ZLogistics ZSales and Distribution ZCredit Management ZMaster Data ZChange The just-released sales order is now reflected in the Customer’s credit limit status:
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10. Create Delivery
As a sales order is processed, its changing status is visible in Credit Management. To see this, we will process one of the sales orders further. To create a delivery for one of ## Health
Express’s sales orders, follow the menu path:
Logistics ZSales and Distribution ZShipping and Transportation ZOutbound Delivery ZCreate ZSingle Document ZWith reference to Sales Order
which will produce the following screen:
Enter ##SP for shipping point and enter a sales order, then click on the enter icon ( ) to produce the following screen:
Click on the save icon ( ) to create the delivery. Use the back icon ( ) until you are at the SAP Easy Access screen, then check ## Health Express’s credit status using the menu path:
ZLogistics ZSales and Distribution ZCredit Management ZMaster Data ZChange Verify the default data, then click on the enter icon ( ). It appears that the status is unchanged, but use the pull-down menu path:
Extras→Sales value
which will produce the warning message:
Click on the enter icon ( ) to see more detail on the sales value:
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Note that the sales value of $1,180 is made up of an open sales order and an open delivery. Click on the enter icon ( ) to close this window, then use the back icon ( ) until you are at the SAP Easy Access screen.
11. Pick Order and Post Goods Issue
To further process the sales order, we can perform the picking and post the goods issue in one step. To do this, follow the menu path:
Logistics ZSales and Distribution ZShipping and Transportation ZOutbound Delivery ZChange ZSingle Document
which will produce the following screen:
Verify that the delivery number is entered, then click on the enter icon ( ) to get the following screen:
The sales value is made up of an open sales order and an open delivery
Enter 300 for SLoc (storage location), 2 for Picked Qty, then click on the Post goods issue icon
( ).
12. Create Billing Document
To create an invoice for the sales order, follow the menu path:
Logistics ZSales and Distribution ZBilling ZBilling Document ZProcess Billing Due List
which will produce the following screen:
Click on the Picking tab,
Enter 300 for SLoc (storage location) Enter 2 for Picked Qty
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Enter ##FS for the Sales Organization, then click on DisplayBillList:
Click on block at end of line to select the delivery, then click on Collective billing document. When processing the delivery is complete, the color of the line will change:
Enter Sales Organization ##FS Click on DisplayBillList
Use the back icon ( ) until you are at the SAP Easy Access screen, then check ## Health
Express’s credit status using the menu path
ZLogistics ZSales and Distribution ZCredit Management ZMaster Data ZChange
As one of ## Health Express’s sales order has now been processed and invoiced, it shows up in the Accounts Receivable category.
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13. Receive payment from the Customer
When we receive payment from the customer, it should free up some of the credit limit. To test this, receive payment from the customer by following the menu path:
Accounting ZFinancial Accounting ZAccounts Receivable ZDocument Entry
ZIncoming Payments
Which will produce the following screen:
Enter the information shown above, then click on Process open items. This will produce the following screen:
Enter today’s date for document date Make sure ##FS is entered for company code and USD is entered for Currency/rate Enter 100000 for Account under bank data Enter 590 for Amount
Double-click on the USD Gross amount to assign the payment to the open invoice, then click on the save icon ( ) to post the payment.
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Click on the back icon ( ), which will produce the following pop-up window:
Click Yes, and you will return to the SAP Easy Access screen.
Check ## Health Express’s credit status one last time using the menu path
ZLogistics ZSales and Distribution ZCredit Management ZMaster Data ZChange Click on the enter icon ( ) to get to the following screen:
Note that paying the invoice has cleared the Receivables item.
To generate a report on this customer, follow the pull-down menu path:
Environment→Reporting→Credit overview
Click on the execute icon ( ) to generate the overview report:
To complete this assignment, you need to print a copy of this report to hand in. To do this, click on the print icon ( ) and you will get the following screen:
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After clicking on the continue icon you should be returned to the Document flow screen and a message like the following should be displayed at the bottom of the screen:
The SAP ERP system will also open window that will contain details of the print job:
