Credit management
Credit management in SD controls the credit risk of selling on account, checking a customer’s credit exposure against a limit and blocking or flagging orders that exceed it. It protects the business from bad debt.
S/4HANA uses SAP Credit Management (FIN-FSCM-CR), a more capable successor to classic SD credit management, with credit scoring and centralised control.
- It tracks each customer’s credit exposure (open orders, deliveries and receivables) against an assigned credit limit, and performs…
- Credit limit per customer/credit account.
- Credit exposure: open orders + deliveries + receivables.
- Watch out: No/weak credit checks, exposure to bad debt.
What credit management does
It tracks each customer’s credit exposure (open orders, deliveries and receivables) against an assigned credit limit, and performs credit checks at order/delivery. If the customer is over limit or has overdue items, the document is blocked for review, preventing further exposure to a risky customer.
Key concepts
- Credit limit per customer/credit account.
- Credit exposure: open orders + deliveries + receivables.
- Credit checks: at order and/or delivery.
- Blocked documents released by credit managers.
S/4HANA credit management
S/4HANA uses SAP Credit Management (FIN-FSCM-CR), a more capable successor to classic SD credit management, with credit scoring and centralised control. It integrates SD (orders/deliveries) with FI (receivables) to give a real-time credit picture and enforce limits across the order-to-cash flow.
Common pitfalls
- No/weak credit checks, exposure to bad debt.
- Blocked orders not managed, delaying legitimate sales.
- Using classic credit mgmt instead of S/4HANA FSCM.