Marjorie Wright

Credit Management in SAP®

S/4HANA
Marjorie Wright
Credit Management in SAP® S/4HANA

ISBN:
978-3-96012-617-1

Editor:
Karen Schoch

Cover Design:
Philip Esch

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Interior Book Design:

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1st Edition 2019

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Table of Contents
Cover
Title
Copyright / Imprint
Introduction
1 Overview
1.1 History of SAP Credit Management
1.2 Comparison of FI-AR-CR to FIN-FSCM-CR
1.3 Product availability
1.4 Structure of this book
1.5 SAP systems in this book
1.6 Use of Business Add-Ins (BAdI)
1.7 System architecture
2 Business Partner
2.1 Purpose and design of the Business Partner
2.2 Business Partner roles
2.3 Credit management role
3 Organizational structure & master data
3.1 Purpose and design of the credit segment
3.2 Additional customizing activities
3.3 Maintain the Business Partner master record
4 Credit limit checking
4.1 Customizing activities
4.2 Maintain Business Partner, credit profile level
5 Documented credit decision
5.1 Business scenario
5.2 Customizing activities
6 Additional features
 6.1 Credit limit request
6.2 Credit exposure update
6.3 Processes
6.4 Enhancements
7 Integration with Accounts Receivable
7.1 Customizing activities
7.2 Business process
8 Integration with sales and distribution
8.1 Customizing activities
8.2 Business process
A The author
B Disclaimer
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Introduction
When I was employed as an accounting manager, one of my
responsibilities was managing customer credit limits. At the time, I felt
overwhelmed with this responsibility and with the inconsistencies I
saw in how accounts were being managed. There was no logic to
approving open accounts, and credit limits followed no discernable
logic. Dealing with customer orders that were blocked for credit
reasons was done with a wink and a prayer. Reporting was non-
existent.

We had tried for many years to work with third party products that
claimed to provide these support services, but none ever fully met our
requirements.

When I began my career with SAP as an Education Consultant, I was

quite interested in taking on the “Financial Supply Chain” curriculum,
as it was then known. From my business background, I felt these
products would certainly add value to any organization.

As an education consultant, I found learners had two distinct

backgrounds: those with experience in very manual, offline processes
(as I had been) and those with experience in very sophisticated “home
grown” online processes. The former group was as happy as I was
with SAP’s out-of-the-box solution, while the latter group often wanted
a “bluer sky”.

One of the many beauties of Financial Supply Chain is that many

customers are quite satisfied with the standard delivered solution.
Those needing more sophistication have hundreds of Business Add-
Ins (BAdIs) to meet their requirements.

Coming from the Finance-Controlling (FI-CO) accounting world, I like

to always preface any discussion around FSCM with the words “this is
not your father’s SAP”. In FI-CO, we are tasked with recording
business transactions to meet a long list of internal and external
requirements. Our tasks in Financial Supply Chain Management
(FSCM) are actually quite simple: gather pertinent information, make a
decision based on that information, and communicate that decision to
the right people.

My hope is that this book aids in your understanding of how SAP

Credit Management delivers just that.

We have added a few icons to highlight important information. These

include:

Tip

Tips highlight information concerning more details

about the subject being described and/or additional
background information.

Example

Examples help illustrate a topic better by relating it to

real world scenarios.

Warning
 Warnings draw attention to information that you
should be aware of when you go through the
examples from this book on your own.

Finally, a note concerning the copyright: All screenshots printed in this

book are the copyright of SAP AG. All rights are reserved by SAP AG.
Copyright pertains to all SAP images in this publication. For
simplification, we will not mention this specifically underneath every
screenshot.
1 Overview
Did you know that SAP delivered a credit management tool many
years prior to FSCM? Let’s review a bit of history and
comparison before we begin dissecting FIN-FSCM-CR.
1.1 History of SAP Credit Management
Prior to 2004, SAP offered a credit management tool referred to as FI-
AR-CR; meaning it was included in “Financial Accounting – Accounts
Receivable – Credit Management”. The determination of customer
credit limits was a manual process, as was updating the Customer
Credit Master Record (FD31/32/33). The product was integrated in the
same SAP system as Sales and Distribution so that orders could pass
through a credit checking process. For many years, these tools were
sufficient.

As the demand for data automation and cost reduction grew, several
third-party providers developed “dashboards” and sophisticated
reports, all of which were cumbersome and required some type of
interface.

In 2004, SAP delivered the first version of its Financial Supply Chain
Management (FIN-FSCM) set of applications. At that time, FIN-FSCM
included the following components:

Credit Management, FIN-FSCM-CR

Biller Direct, FIN-FSCM-BD
Dispute Management, FIN-FSCM-DM
Collections Management, FIN-FSCM-COL
In House Cash, FIN-FSCM-IHC
Treasury and Risk Management, FIN-FSCM-TRM

The overriding goal was to reduce manual tasks by bringing offline

processes into SAP, and to do so across SAP and non-SAP
environments. While these components can be implemented as stand-
alone, they provide the most power when combined, because each
one has features built to support the follow-on process of the other(s).
Going forward, each SAP-delivered enhancement package continued
to answer customer feedback by delivering more and more features.
By the last SAP-ERP 6.0 EHP8, I believe even those wishing for the
bluest of blue skies were made happy.

Along the way, these components were “re-branded” as SAP

Receivables Management, comprising a core of Credit, Biller Direct,
Disputes, and Collections.

Then came S4/HANA, with more process improvements on top of the

speed and agility of the HANA database.
1.2 Comparison of FI-AR-CR to FIN-FSCM-CR
Let’s focus now on some of the credit management features. SAP has
provided an application for supporting and automating credit
decisions. Within FIN-FSCM-CM, there are tools to reduce manual
offline tasks by using formulas to calculate a score that indicates a
customer’s creditworthiness, as well as a credit limit. Data can be
imported from external credit reporting agencies and used in these
formulas.

To sum up, the basic business processes that are supported are:

determination of a customer’s creditworthiness by using internal

and external information
determination of an objective credit limit for the customer
integration with sales and distribution to monitor order activity and
approval
integration with accounts receivable to monitor key performance
such as payment history
route request for credit limit increases through the organization
documentation of credit-related decisions
provision of reporting capabilities to monitor risk
support for single, distributed, and non-SAP landscapes

As we begin to focus on the Credit Management (FIN-FSCM-CM)

application, it is important to consider SAP’s legacy credit
management tools. Before the deployment of the FSCM suite of
applications, there was a Financial Accounting application for credit
management—FI-AR-CR. This application was sufficient and was
widely used by SAP customers. It provided the basic functions
required to manage a customer from a credit perspective and to check
against a credit limit when orders were accepted and maintained. It
worked well for many years. Its major shortcomings were that it
required too many manual tasks, and it was self-contained within an
SAP instance.

In this older design, Financial Accounting was responsible for the

customer credit master record; including the determination of a credit
limit and how to assign or share that limit across the organizational
structure (this was called the credit control area). As for the decisions
about when and how to check a customer’s available credit, Sales and
Distribution (SB-BF-CM) maintained these rules in a transaction called
OVA8. So, we can see that credit was something of a shared
responsibility.

In the newer design of FIN-FSCM-CR, the goal was to bring more

offline tasks into SAP and to reduce manual tasks. Here, I must also
mention the standardization opportunity that this presents. When I
took on the role of monitoring credit I was dismayed to see no logic or
equanimity in how customers were rated or how credit limits had been
determined. These had been the byproduct of various offline tasks. By
having features to calculate these based on sets of rules or logic, the
subjectiveness is removed. Now, FSCM manages the entire process
with rules engines, and is fully integrated with Sales and Distribution.

In Figure 1.1, we can compare some of the functions and terminology

of FI-AR-CR and FIN-FSCM-CR.
Figure 1.1: FI-AR-CR compared to FIN-FSCM-CR
1.3 Product availability
Historically, FSCM was activated as an option via the Switch
Framework. Business partners were a supplemental master record to
the customer.

When first deployed in 2004, the FSCM components were considered

an add-on and were sold under a separate license fee structure.

With the advent of ERP 6.0, many new features were deployed via
enhancement packs. These carried over to the S4/HANA Simple
Finance. A brief timeline can be seen in Figure 1.2 and Figure 1.3.

Figure 1.2: ERP timeline

Figure 1.3: S4/HANA Finance timeline

With S4/HANA 1610, FSCM credit management became the default

solution and the Business Partner became a mandatory master
record, replacing the customer. A brief timeline can be seen in Figure
1.4, below.

Figure 1.4: S4/HANA Enterprise Management timeline

HANA on-premise

No HANA Cloud solutions are explored here, only on-

premise.
1.4 Structure of this book
One of the goals of this book is to provide knowledge for both
business users and technical support staff. To that end, each chapter
contains a section directed to each type of user.
1.5 SAP systems in this book
The graphics in this book are taken from an S4 HANA 1709 on-
premise environment. Any deviations to an ERP environment will be
noted in the text.

To support readers who are on ERP, Figure 1.5 and Figure 1.6 show
the menu paths of the Easy Access menu and the IMG menu, as seen
in ERP 6.0 EHP 8.

Figure 1.5: ERP 6.0 application menu

Figure 1.6: ERP 6.0 customizing menu

To support readers who are on S4 HANA, Figure 1.7 and Figure 1.8
show the menu paths of the Easy Access menu and the IMG menu,
as seen in S4 HANA on-premise, 1709.
Figure 1.7: S4 HANA application menu

Menu alert

Note the folder “Current Settings” in Figure 1.7 is not

found in SAP ERP.
Figure 1.8: S4 HANA customizing menu

Menu alert

Note that the HANA menu has been slightly re-

structured compared to the ERP menu.

In each customizing menu, there are two sub-menus:

Credit Risk Monitoring—here we find all settings relevant to the

credit customization.
Integration with Accounts Receivable and Sales and Distribution
—here we find all settings relevant to integration between credit
and those components.
Distributed systems

In the case of a distributed landscape, you make all

integration settings in each of those systems.
1.6 Use of Business Add-Ins (BAdI)
Business add-ins, or “BAdI’s” are object-oriented enhancement
techniques used to add your own functionality to the standard SAP
functionality. There are hundreds of BAdI’s found throughout the
FSCM suite of products, often in a folder titled simply
“Enhancements”.

I have found most customers to be quite satisfied with the standard

SAP functions of FSCM. For those customers with quite specific,
unique requirements, there is a BAdI available.

This book focuses on standard SAP functionality. However, at times I

may mention a specific BAdI as a solution,

ABAP developer

BAdI’s fall under the scope of ABAP developers. I

strongly suggest consulting one if you plan to use
BAdI’s.
1.7 System architecture
The FSCM suite can be implemented in a single system, or across
distributed landscapes. It is not our scope in this book to cover system
architecture.

FIN-FSCM-CR requires communication with FI-AR and SD. This is

accomplished via SAP’s enterprise application integration. Like so
many SAP products, the exact naming has evolved over time. You
may know this as:

XI Exchange Infrastructure
PI Process Integration
PO Process Orchestration, or
WSRM Web Reliable Messaging

In this book, the focus is on standard FSCM functionality. Please

consult your SAP NetWeaver expert on these settings.
2 Business Partner
You may be wondering exactly what a Business Partner is and
why we need one. Don’t we already have customer and vendor
master data in SAP? In this chapter, we explore the Business
Partner master record, and its relationship to the older master
data model.
2.1 Purpose and design of the Business Partner
The Business Partner is a cross application master record in SAP. It
allows for one master record (one account number) to identify the
people and/or companies with which we have some kind of business
relationship. This could consist of one, or several, relationships.

Some examples of Business Partners are:

customers
vendors
employees
prospects
agents
borrowers

The Business Partner is not a new master record. SAP applications

such as Contract Accounts Receivable, Loan Management, CRM, and
FSCM have for many years incorporated this master record.

With S4 HANA Enterprise (1610 onward), the Business Partner

replaces the traditional customer and vendor master record design in
SAP. If you enter the “legacy” transaction codes in the command field
(i.e. FD0x, VD0x, XD0x, FK0x, MK0x, and XK0x), or if you select them
in the application menu, the system returns a message redirecting you
to the Business Partner (BP) transaction (see Figure 2.1).
Figure 2.1: Redirection to transaction BP

This new BP transaction gives a single point of entry for creating and
maintaining all Business Partners across multiple components. SAP’s
previous customer/vendor model was limited and could not support
the following additional benefits:

multiple addresses for a single Business Partner

time dependency of attributes
a single Business Partner as both a customer and a vendor

To navigate the Credit Management application menu for Business

Partner, follow the menu path seen in Figure 2.2.
Figure 2.2: BP in the application menu

Using the transaction code

You can also type transaction code BP in the

command field.

As illustrated in Figure 2.3, once the BP transaction is executed you

can use the section on the left of the screen to search for Business
Partners, or enter the alpha-numeric key of the master record. This
single transaction, BP, supports the create , and display/change
activities.
Figure 2.3: BP master record

Business Partner category

When the Business Partner is created, use one of the

three SAP-delivered categories: Person,
Organization, or Group. Each category has specific
field requirements and tab designs.

Enlarging the screen area

For a better view, you can close the locator by clicking

the icon, just to the left of “Business Partner”.
2.2 Business Partner roles
Business Partners have various roles assigned to them. SAP explains
these roles as:

“Rights and responsibilities that a business partner can have in

various business transactions”

Each role assigned to the Business Partner controls the allowed

category and view, or screen layout, of the master record.

Each role is assigned to the Business Partner within a single

transaction code: BP Business Partner.

Think of the role as a method of determining which business

transaction the Business Partner can participate in. For each kind of
business transaction, certain information is required on the master
record.

Examples of the required information include:

If we are going to enter into business with another legal entity, we

need to know the name and address of that person/company.
If the business partner is allowed to post to financial accounting
as a customer, the general ledger reconciliation account is
needed.
If the same business partner can place sales orders with our
company, then sales area information is required.
If the same business partner is managed by credit, then
information relative to credit limit and credit worthiness is needed.

The examples above can be aligned to the following SAP-delivered

BP roles:
 000000: General Data—representing SAP client-level data such
as account number, name, address, and banking
FLCU00: Customer—representing our company code data,
reconciliation account, sort key, and payment terms
FLCU01: Customer—representing our sales area data, shipping,
billing, and partners
UKM000: SAP Credit Management—representing the data
needed to manage credit limits, and credit checking

If we drew this design as a hierarchy, it would look something like the

representation shown in Figure 2.4:

Figure 2.4: Hierarchical example of BP roles

As you can see, this follows SAP’s long-standing organizational

structure design of master data. As always, the General Data (SAP
Client level data) must be created first.

The Business Partner can be created manually, through the use of the
Customer Vendor Integration tools.

Customer Vendor Integration

 The cross application component Customer Vendor
Integration manages the links between
customers/vendors/business partners.

SAP Tables

When the Business Partner is created in the General

Data role, table BUT000 is updated, as well as the
traditional LFA1 and KNA1 tables. Programs in SAP
still reference those traditional tables.

For SAP ERP systems, refer to SAP note 956054—“BP_CVI:

Customer/vendor integration as of ERP 6.00”.

For migration to S4 HANA, CVI is a step in the Conversion of

Accounting to the SAP S4 HANA menu.

For additional notes, refer to SAP note 2265093—“Business Partner

Approach”.

In the following figures, we can see some of our customer’s basic role
information: CUST-01 My Best Customer, Inc.

In the General role (see Figure 2.5), we find basic SAP client level
data such as name and address.
Figure 2.5: BP, 000000 General role

After selecting the FI Customer role, we can now select a pushbutton

for COMPANY CODE integration (see Figure 2.6).

Figure 2.6: BP, Select FI Customer role

In the FI Customer role, shown in Figure 2.7, we find our integration

with Financial Accounting. Settings such as company code and
reconciliation account are available.
Figure 2.7: BP, FLCU00 FI Customer role

Next, we select the (SD) Customer role, shown Figure 2.8, and we
can then select the pushbutton for SALES AND DISTRIBUTION integration.

Figure 2.8: BP, Select (SD) Customer role

In the (SD) Customer role, shown in Figure 2.9, we find our integration
with Sales and Distribution. Settings such as SALES AREA and
PRICING/STATISTICS are available.
Figure 2.9: BP, FLCU01 (SD) Customer role
2.3 Credit management role
For our purposes, we will work with the Business Partner as a
customer integrated with Financial Accounting, Sales and Distribution,
and Credit Management. As we begin our text, the Business Partner
already exists in all roles except Credit Management.

For a BP to participate in Credit Management, the role of UKM000-

SAP Credit Management must be available and assigned to the BP
master record.

2.3.1 Customizing the role

The role of UKM000—SAP Credit Management, is delivered by SAP.
The BP role’s settings control programs, the allowed BP categories,
and the available fields/screen sequences of the master record.

You should not have reason to make changes to this object. It is

shown in Figure 2.10.

IMG MENU • CROSS-APPLICATION COMPONENTS • SAP BUSINESS PARTNER •

BUSINESS PARTNER • BASIC SETTINGS • BUSINESS PARTNER ROLES • DEFINE
BP ROLES
Figure 2.10: Define BP Role

2.3.2 Maintaining the master record

The role must be assigned to the Business Partner master record.
This role brings with it the categories and views needed to maintain
the BP master record with credit-relevant settings. This assignment is
required for the BP to participate in Credit Management.

EASY ACCESS MENU • ACCOUNTING • FINANCIAL SUPPLY CHAIN • CREDIT

MANAGEMENT • MASTER DATA • BUSINESS PARTNER MASTER DATA • UKM_BP
Figure 2.11: Maintain BP options

Once the transaction is opened, you have several navigation options.

As seen in Figure 2.11, you can use the FIND feature on the left of
the screen to search by various criteria for a BP. By selecting the
PERSONALIZATION icon at the top right of the screen you can open a
SETTINGS dialog for the default when opening the transaction, and
also hide the LOCATOR used to search.

If you hide the LOCATOR, you can search for a Business Partner using
the DROPDOWN in the bottom right corner or use the OPEN BP icon from
the top of the screen, as shown in Figure 2.12.
Figure 2.12: BP search

Check your type of processing

Once you’ve entered the BP number and pressed

ENTER, it’s a good idea to check the header of your
screen to determine which mode you are in.

In Figure 2.13, if you are in DISPLAY mode , the options available for
selection from the DISPLAY IN BP ROLE dropdown are only for roles
already assigned to the Business Partner. Use the SWITCH BETWEEN
DISPLAY AND CHANGE icon to change the processing type.
Figure 2.13: Display in BP role

Once in change mode, you can select the role UKM000 SAP Credit
Management from the CHANGE IN BP ROLE dropdown list, as shown in
Figure 2.14.

Figure 2.14: Change in BP role

Show keys

To see the technical name of dropdown options (e.g.,

UKM000), select the checkbox for SHOW KEYS WITHIN
DROPDOWN LISTS in your GUI options.

Now that the role for credit management is assigned to the BP master
record, two additional tabs titled CREDIT PROFILE and CREDIT
WORTHINESS DATA are available for input (see Figure 2.15). These tabs
contain the field groupings for credit scoring and credit checking, as
well as external credit information. A pushbutton titled CREDIT
SEGMENT DATA is also now available at the top of the screen. In this
view, you find the organizational structure, or credit segment, and find
the details for credit exposure and payment behavior/KPI. We will
come back to these fields and their usage in Chapter 3.

Figure 2.15: New role SAP Credit Management

Personalization

Always check the top of your screen when you come

to the BP transactions to note which view and which
tab are being displayed. You can use the
personalization settings to control this.
3 Organizational structure &
master data
As we begin to review the settings required in the SAP
customizing menu (IMG), it is important to note the two main
folders found here. The first folder contains all settings relevant
to credit management. The second folder contains all settings
relevant to integration with FI-AR and with SD.

Landscape

Options and menu paths discussed here are based on

an S4/HANA 1709 system. Any deviations to ERP will
be noted.
3.1 Purpose and design of the credit segment
Technically, SAP has only a “master data” folder in the IMG menu.
However, I continue to view the credit segment as organizational
structure for credit management.

SAP’s definition of the credit segment is as follows:

“Organizational unit of SAP Credit Management that companies can

define, for example, by product type or business area. It groups a
company's business transactions from the view of credit assignment
and control.”

If we look a bit further in the menu, to the folders for integration with
FI-AR and with SD, it is easier to understand what the credit segment
must represent—quite simply, the organizational structure of FI and of
SD.

In the integration with FI-AR, for example, the credit segment is

assigned to a company code.

In the integration with SD, the credit segment is assigned to a credit

control area; and these, in turn, are assigned to a sales area in SD.

So, we can understand that the credit segment is used to manage the
FI and SD business transactions (open items, payments, sales orders,
deliveries, billings). We are able to dissect or combine these traditional
organizational SAP structures into credit segments for the purpose of
managing the customer’s credit.

To be effective in creating the credit segments, we must understand

the FI and SD design. Later, the credit segment will be assigned to the
organizational structures of both.

Each business partner must always have a main credit segment, or

0000. SAP delivers segment 0000 as the Main Credit Segment. You
can create as many additional credit segments as your organization
requires.

Each credit segment must have a name, a currency for the credit
check to be carried out, and an exchange rate type.

You can also select the ADD. CONTRIBUTION TO MAIN CREDIT SEGMENT
checkbox. Selecting this enables the liability of this credit segment to
“roll up” or be accumulated on the main credit segment (0000). The
benefit of this is to enable you to manage credit utilization at the main
level, as well as at the lower credit segments.

3.1.1 Creating a credit segment

To create a new credit segment, follow the menu path:

IMG MENU • FINANCIAL SUPPLY CHAIN • CREDIT MANAGEMENT • CREDIT RISK

MONITORING • MASTER DATA • CREATE CREDIT SEGMENT

From here, select the NEW ENTRIES pushbutton to create a new credit
segment (see Figure 3.1).

Figure 3.1: Create credit segment

Guidelines for the definition of the credit segment are:

CREDIT SEGMENT—can be alphanumeric

NAME—should be a clear description
CURRENCY—enter a currency
EXCH. RATE TYPE—enter an exchange rate type for the segment
ADD. CONTRIBUTION TO MAIN CREDIT SEGMENT—select this check box
if you want the commitments of this credit segment to be included
in the total commitments of the main credit segment.

Add. Contribution checkbox

This can be useful when you are checking credit at a

segment level and also at the main segment level.

Later, in Chapter 8, we will see how to assign the FI/SD organization

structure to these segments.

3.1.2 Business Partner Master Data: Credit Segment

To maintain a business partner master record with a credit segment,
follow the menu path:

EASY ACCESS MENU • ACCOUNTING • FINANCIAL SUPPLY CHAIN • CREDIT

MANAGEMENT • MASTER DATA • BUSINESS PARTNER MASTER DATA • UKM_BP

Display or change mode

 Be certain to check your screen title to check if you
are in the transaction’s display mode or change mode.

Figure 3.2: Display Business Partner in credit management role

In change mode, review the BUSINESS PARTNER number and the role
being displayed (see Figure 3.2). To toggle from display to change
mode, use the SWITCH BETWEEN DISPLAY AND CHANGE icon .If you need
to select a different business partner, use the OPEN BP icon and enter
another business partner .

Once in change mode, select the CREDIT SEGMENT DATA pushbutton, as

shown in Figure 3.3.

Figure 3.3: Select Credit Segment Data pushbutton

From the Credit Segment dropdown, select a credit segment to add to

the business partner (see Figure 3.4).
Figure 3.4: Maintain credit segment

Main Credit Segment

All business partners must have this segment

assigned to them here.

Mass maintenance to add segment

Currently, there is no mass maintenance transaction

to add segments to business partner master records.
 Saving your data

In addition to assigning a credit segment to the

business partner, you must enter data in a credit
segment field in order to save changes to the master
record.

3.1.3 Business Partner Master Data: General Data

In this section, we review the tabs added to the business partner when
the role of Credit Management is assigned.

Credit Profile

Figure 3.5: General Data, Credit Profile tab—upper section

In Figure 3.5, we see the upper section of the credit profile tab.

Guidelines for these fields are:

 RULES—the rule selected here determines the creditworthiness
score and is used to define the credit limit calculation routine in a
later step.
SCORE—this is determined from the Rules above. It is meant to
indicate creditworthiness and can be used in downstream
processes such as credit checking.
RISK CLASS—this is also a creditworthiness indicator used in
downstream processes such as credit checking. In Chapter 8, we
will see how this field value is integrated with the SD risk
category.
CHECK RULE—this determines the credit checking routine.
CUSTOMER GROUP—this can be used to delineate customers, which
is useful in reporting.
EXTERNAL CREDIT INFORMATION—this links the business partner to an
external credit reporting agency.

Scroll down

Use the scroll bar to the right of the window to move

to the lower section of the screen.
Figure 3.6: General Data, Credit Profile tab—lower section

Figure 3.6 shows the fields in the lower section. Guidelines for these
are:

NOTES FOR CREDIT DATA—the note creation/editor feature can be

used to enter notes manually.
INFORMATION CAT.—this can be used to indicate collateral, credit
insurance, and credit checking exceptions. These can be
referenced by the formula editor for credit checking routines.

Each of these fields has a related setting in customization. We will

focus on several of these in Chapter 4.

Creditworthiness Data
Figure 3.7: General Data, Creditworthiness tab

The fields seen in Figure 3.7 can be used to support various business
requirements. These can be referenced by the formula editor for credit
checking routines, as discussed in Chapter 4.

3.1.4 Business Partner Master Data: Credit Segment Data

In this section, we review the tabs added to the business partner when
the credit segment is assigned.

Credit Limit and Control—Credit Limit section

Select the CREDIT SEGMENT DATA pushbutton on the Business Partner
master record to display/change this section.
Figure 3.8: Credit Segment Data, Credit Limit and Control tab, Credit Limit section

Guidelines for the fields in the credit limit section, shown in Figure 3.8,
are:

RULES—the rule for credit limit calculation is displayed here. It was

assigned from the Credit Profile tab scoring rules. It cannot be
changed here.
LIMIT NOT DEFINED—if this radio button is selected, no credit limit
has been determined.
LIMIT DEFINED—to apply the rules and calculate a credit limit, click
the calculator icon on this row, mid-screen. A limit is calculated
and displayed in the limit field, as well as a “valid to” date. The
radio button is then selected.
CREDIT EXPOSURE—the values of open invoices and processed
orders (those released from credit checking) populate this field
during a downstream process.
UTILIZATION %—credit exposure divided by credit limit displays as a
percentage in this field.
 Credit exposure = commitment

Credit exposure, as described above, is also referred

to as commitments. This represents the amount of
credit limit already consumed by open orders and
open accounts receivable.

Figure 3.9: Credit Segment Data, Credit Limit and Control tab, Control & Further Information
sections

Guidelines for the fields in the control section, shown in Figure 3.9,
are:

BLOCKED IN CREDIT MANAGEMENT—checking this box causes all

incoming sales orders to be blocked. The credit checking routine
is not executed.
BLOCK REASON—this field can be used to support various business
requirements.
 SPECIAL ATTENTION—a failed credit check causes this checkbox to
be selected, it can also be manually selected. It is leveraged in
the information system.
INFORMATION CAT.— this can be used to indicate collateral, credit
insurance, and credit checking exceptions. These can be
referenced by the formula editor for credit checking routines.

Information Cat.

These fields are also found on the General Data of

the Business Partner. The segment level data takes
priority.

Payment Behavior Key Figures

Figure 3.10: Payment Behavior Key Figures

The information shown in Figure 3.10 is used by the credit checking

rules. It is updated by executing a transaction found on the application
menu: UKM_TRANSFER_VECTOR – UPDATE KEY FIGURES FOR
PAYMENT HISTORY. Please refer to Chapter 8 for more details on this
transaction.

The data groups are as follows (not all are shown here):

HIGHEST DUNNING LEVEL

OLDEST OPEN ITEM
LAST PAYMENT
KEY FIGURES
KPI Payment Behavior

Figure 3.11: KPI Payment Behavior

The tab shown in Figure 3.11 can be updated via a Business Add-in
with customized key performance indicators.
3.2 Additional customizing activities
Now that we have seen the traditional SAP organizational structure
and how it affects the Business Partner master data, let’s move to
some additional activities found in the “master data” folder of the IMG,
as shown in Figure 3.12.

Figure 3.12: IMG Master Data menu

Menu reminder

Remember that in the customizing menu, there are

two sub-menus. We are working in the Credit Risk
Monitoring sub-menu.

3.2.1 Define rating procedure

If you use an external credit information provider, for example Dun
and Bradstreet, you need to complete these settings to compare
external ratings. This is important if you are using external ratings in
any of your scoring and credit limit calculations.

3.2.2 Define customer credit group

These are created as per your reporting requirement. The Business
Partner master record is updated with the group, as shown previously
in Figure 3.5

3.2.3 Define formulas

Here, using an SAP Formula Editor, you define the score and credit
limit formulas.

Figure 3.13: Define formulas

In Figure 3.13, note the column titled RESULT TYPE; there are two
options here, a scoring calculation and a limit calculation.

Let’s first look at an example of SCORE_B2B, a scoring calculation.

1. Select the grey box to the left of the formula.

 2. Select the FORMULA EDITOR pushbutton.

The result is then displayed, as in Figure 3.14.

Figure 3.14: Formula Maintenance Score_B2B

The SAP Formula Editor uses Boolean logic to access data used in
the calculation of a score to indicate the creditworthiness of a
Business Partner.

The basic steps of the SAP Formula Editor are shown in Figure 3.14.
In the editor box , the formula is displayed. Various fields and
functions can be selected to create the formula. There can be
multiple steps in the formula, each using an if/then/else logical
sequence .

ABAP technical skills

It’s a good idea to work with an ABAP specialist to

create these formulas to meet your business
requirements. The formula editor is a fairly technical
object and it is quite unforgiving with regard to syntax
errors.
SAP provides examples of formulas to help you get started. You can
maintain and/or copy these for your specifications. The following are
delivered with your system:

Score_B2B—Score for Business Customers

Score_B2C—Score for Private Customers

Figure 3.15: Formula Maintenance Limit B2B

In Figure 3.15, we see an example of a credit limit score.

The basic steps of the SAP Formula Editor are shown in Figure 3.15.
In the editor box the formula is displayed. Various fields and
functions can be selected to create the formula. There can be
multiple steps in the formula, each using an if/then/else logical
sequence .

SAP provides examples of formulas to help you get started. You can
maintain and/or copy these for your specifications. The following are
delivered with your system:

Limit_B2B—Credit Limit for Business Customers

Limit_B2C—Credit Limit for Private Customers
3.2.4 Create rule for scoring and credit limit calculation
We now bring the formulas for scoring and credit limit together into
rules. A rule can then be assigned to the Business Partner master
record on the Credit Profile tab.

Figure 3.16: Rule for Scoring and Credit Limit Calculation

In Figure 3.16, we see a list of existing RULES and DEFAULT radio

buttons. If a rule is selected, that rule is set by default when new
Business Partners with the role of Credit Management are created. On
the left side of the display , we find the DIALOG STRUCTURE for
assignment of a SCORE formula, a CREDIT LIMIT formula, and a RATING
PROCEDURE.

To navigate in the DIALOG STRUCTURE, select the grey box to the left of
a rule, and then select one of the folders of the structure, as shown in
Figure 3.17. For our example, we are using an existing rule (B2B-
EXIST) and the score folder.
Figure 3.17: Navigate to the Score Dialog Structure

As shown in Figure 3.18, double click on the selected folder to

open the OVERVIEW. In the score section of the display , we see the
score formula, the number of days’ VALIDITY of the score, and a TRACE
checkbox. If this checkbox is selected, users can see an overview of
how the score was calculated on the Business Partner master record.

Figure 3.18: Score Overview

Return to the previous display by selecting the back icon.

To navigate again in the DIALOG STRUCTURE, select the grey box to the
left of a rule, and then select one of the folders of the structure, as
shown in Figure 3.19. This time, we use an existing rule (B2B-EXIST)
and the credit limit folder for our example.

Figure 3.19: Navigate to the Credit Limit Dialog Structure

As shown in Figure 3.20, double click on the selected folder to

open the OVERVIEW. In the credit limit section of the display , we find
the CREDIT LIMIT FORMULA, the number of days’ VALIDITY of the score (the
limit will expire after this date), and a TRACE checkbox. If this checkbox
is selected, users can see an overview of how the credit limit was
calculated on the Business Partner master record. Lastly, the MAXIMUM
C column can be used to enter a percentage rate by which the credit
limit can be increased without approval. This feature is valid only when
using the follow-on process to request a credit limit change.

Figure 3.20: Credit Limit overview

Note that the first column of the credit limit overview is for the credit
segment, as shown in the enlargement in Figure 3.21. This means
that each credit segment (which is our organizational structure) can
have a different formula for calculation of the credit limit.

Figure 3.21: Enlargement of Credit Limit display

Display formula
 Watch for the icon. You can select this
icon to see the formula editor.

SAP provides examples of rules for scoring to help you get started.
You can maintain and/or copy these for your specifications. The
following are delivered with your system:

B2B-Existing Rule—for existing business customers

B2B-New Rule—for new business customers
B2C-Existing Rule—for existing private customers
B2C-New Rule—for new private customers

3.2.5 Create risk classes

Our last setting in this menu is the creation of risk classes. The risk
class is meant to be an indicator of the Business Partner’s
creditworthiness. It is an integration point with the Sales and
Distribution risk category, which is discussed in more detail in Chapter
8.

When the scoring formula is used to calculate the score, the risk class
can be automatically assigned to the Business Partner by assigning a
score range. You can also manually enter a risk class on the Business
Partner.

In Figure 3.22, you can see the six examples supplied with your
system by SAP.
Figure 3.22: Risk Class
3.3 Maintain the Business Partner master record
Now that we understand the master data configuration settings, let’s
return to the Business Partner to see how this master record is
affected. We’ll use a very simple example of scoring and credit limit
rules, and introduce a nice feature to identify your best and worst
Business Partners.

3.3.1 Negative and premium customer list

In this setting, found on the application menu, you can identify your
worst and best Business Partners by entering them manually in the list
as a “negative” or a “premium”. The result can be used in the scoring
calculation and other follow-on processes via BAdIs.

You can also use BAdIs to populate this list based on criteria. If using
BAdI NEGATIVE AND PREMIUM CUSTOMER LISTS FIN_CR_BWLIST_B, you
can implement methods IS_ON_BLACK_LIST and
IS_ON_WHITE_LIST.

To view and manually maintain the list, follow the application menu
path:

ACCOUNTING • FINANCIAL SUPPLY CHAIN MANAGEMENT • CREDIT MANAGEMENT

• MASTER DATA • NEGATIVE AND PREMIUM CUSTOMER LISTS
UKM_BLACK_WHITE

In our example, this list is leveraged in the scoring formula. In Figure

3.23, we see that our Business Partner CUST-01 has been manually
added to the list as a premium account.
Figure 3.23: Negative/premium customer list

3.3.2 Maintain Business Partner, Credit Profile Level

To maintain the Business Partner at the Credit Profile level, follow the
application menu path:

ACCOUNTING • FINANCIAL SUPPLY CHAIN MANAGEMENT • CREDIT MANAGEMENT

• MASTER DATA • BUSINESS PARTNER MASTER DATA UKM_BP

BP Navigation

Refer to Chapter 3 Organizational structure & master

data for tips on navigation in the UKM_BP transaction.

Check your settings

Make certain you are in change mode, role of

UKM000 Credit Management, General Data, and
Credit Profile tab.
Figure 3.24: Maintain BP credit profile

In the RULES field under the CREDIT PROFILE tab (see Figure 3.24),
select your scoring rule , and select the Calc. with Formula icon
. The result of the scoring formula is then displayed in the SCORE field
. The VALID TO date and the RISK CLASS will also have been
updated.

Select the Information on Formula icon to view the RULE

EVALUATION, as shown in Figure 3.25.

Figure 3.25: Rule Evaluation, score

In this simple example, the scoring formula found the Business
Partner in the “positive” list and assigned a score of 100 (see
Figure 3.26).

Figure 3.26: Scoring formula

3.3.3 Maintain Business Partner, Credit Segment Level

To maintain the Business Partner at the Credit Segment level, follow
the application menu path:

ACCOUNTING • FINANCIAL SUPPLY CHAIN MANAGEMENT • CREDIT MANAGEMENT

• MASTER DATA • BUSINESS PARTNER MASTER DATA UKM_BP

Check your settings

Make certain you are in change mode, role of

UKM000 Credit Management, Credit Segment Data,
and Credit Limit and Control tab
Figure 3.27: Maintain BP credit limit and control

As shown in Figure 3.27, from the CREDIT SEGMENT DATA, select a

CREDIT SEGMENT . On the CREDIT LIMIT AND CONTROL tab, notice the
RULES field is greyed out; it was assigned from the rule entered in
the credit profile and cannot be manually changed. Also note at this
point that the LIMIT field is not filled, and the radio button LIMIT NOT
DEFINED is selected.

After selecting the Limit Calc. with Formula icon , the credit limit
formula will be executed, with the results then shown (see Figure
3.28). Note that the radio button LIMIT DEFINED is now selected, the
LIMIT field now has a credit limit of 100.000,00 USD, and the VALID
TO date has also been entered.
Figure 3.28: BP credit limit and control, with credit limit calculated

Select the Information on Formula icon to view the RULE

EVALUATION, as shown in Figure 3.29.

Figure 3.29: Rule Evaluation, credit limit

In this simple example, the credit limit formula (see Figure 3.30)
multiplied the previously calculated score (own_rating) by 1,000,
resulting in the $100,000.00 credit limit.
Figure 3.30: Credit limit formula

Credit limit at segment level

In this simple example, we are working only with the

Main Credit Segment. Remember that each Credit
Segment can have a different Credit Limit formula.
4 Credit limit checking
For a Business Partner to participate in the credit checking
routine of sales orders, there must be a check rule on the master
data. In this chapter, we review IMG settings related to credit limit
checking and see how to maintain the Business Partner master
data.

Differences to FI-AR-CM

In the legacy SAP credit management product, Sales

and Distribution was responsible for many of these
tasks. Later, we will see some integration points with
SD.
4.1 Customizing activities
Let’s begin this chapter with a view of the customizing menu as a
reference point (see Figure 4.1).

Figure 4.1: IMG, Credit Limit Check menu

4.1.1 Define blocking reasons

Blocking reasons can be created to meet all business requirements.
The reason can be entered manually on the Business Partner master
data. By choosing an event category in the last column, the reason
code set activates that event. An example is shown in Figure 4.2.

Workflow

By using an event category combined with a follow-on

action, workflow can be triggered.
Figure 4.2: Define blocking reasons

4.1.2 Define info categories

Info categories allow you to store pertinent information on the
Business Partner master data. Each category has an info type which
can be used to provide more details.

Category—type example

The info category ‘collateral’ can have info types that

differentiate between the kinds of collateral a
Business Partner can have, such as ‘mortgage loan’
or ‘guarantee’. This allows the two types to be treated
differently in scoring and credit limit formulas.

SAP pre-determines the info category, but you can create the info
types to meet your business requirements. The categories and their
usage are shown in Figure 4.3.
Figure 4.3: Info categories

An example of the category Collateral , with an inset of types , is

shown in Figure 4.4.

Figure 4.4: Info Category overview

4.1.3 Define checking rules

The credit checking rule consists of individual steps or “checks”, each
with parameters, to be applied at the time of the order-related credit
check. The checking rule is entered on the Business Partner master
data, at the Credit Profile level.

SAP delivers the checks and you provide the parameters; and you
combine relevant steps into a checking rule that meets your business
requirements.

Let’s review an example of a checking rule with multiple checks. Note

in Figure 4.5 that there is an option for message logging , a
checkbox if you want to consider exceptions , and a radio button to
make a rule the default when new Business Partners are created.

Figure 4.5: Check rule overview

From here, we can navigate to the CHECKS folder under DIALOG

STRUCTURE on the left.

Navigation

Remember to select the grey box to the left of a rule,

then double click on a folder in the DIALOG STRUCTURE.
Figure 4.6: Check Rule steps

In Figure 4.6, we can see that check rule 01 contains six individual
steps , which have six parameters .

Key performance indicators

As you review these check rule steps, note that most

refer to data found on the Business Partner as key
performance indicators.

Let’s review several of these steps in more detail. First, let’s look at
step 010 (Statistical Check of Credit Exposure) in Figure 4.7. Here, we
can see parameter check boxes which indicate whether we want the
Collateral and Credit insurance info categories to be considered.

Navigation

Remember to select the grey box to the left of an individual step

and select the details icon.
Figure 4.7: Individual Step 010

Statistical check

You may be wondering where you can indicate a

horizon in days for the step. Individual step 010 does
not allow for this. Later, we will look at a dynamic step
which allows a horizon.

Next, let’s review step 110 (Check for Age of Oldest Open Item). In
Figure 4.8, we can see the field where we enter the number of days.

Figure 4.8: Individual Step 110

Finally, let’s take a look at a dynamic step that allows a horizon to be

entered. Using check rule 03 and individual step 030, we can see the
field where we enter a number of days for the horizon (see Figure
4.9). Note the additional info category check boxes here.

Figure 4.9: Individual Step 030

4.1.4 Commonly-used check steps

Every organization has different business requirements for the data
used in credit checking. SAP delivers examples that meet most of
these requirements. If you have a more complex requirement,
consider creating your own using the BAdI—Individual Step of Credit
Check (UKM_CHECK_STEP).

Figure 4.10 shows the usage of several common check steps:

Figure 4.10: Check step usage
4.2 Maintain Business Partner, credit profile level
The check rule created in customizing must be entered in the
Business Partner master data.

To maintain the Business Partner at the credit profile level, follow the
application menu path:

ACCOUNTING • FINANCIAL SUPPLY CHAIN MANAGEMENT • CREDIT MANAGEMENT

• MASTER DATA • BUSINESS PARTNER MASTER DATA UKM_BP

Figure 4.11: Maintain BP Check Rule

Under the CREDIT PROFILE tab, in the CHECK RULE field , select a rule
from the dropdown (see Figure 4.11).
5 Documented credit decision
When a sales order is blocked for credit reasons, a decision must
be made in order to resolve the situation. Such credit decisions
have previously been handled outside of SAP. This chapter
provides an overview of the process available in SAP.
5.1 Business scenario
Once a sales order has failed credit checking and is blocked for credit,
someone in the organization must review the situation and make a
decision on how to proceed. The decision might be to reject the sales
order, to contact the customer for a payment, or perhaps to increase
the credit limit. Often, this review process involves several reviewers
and perhaps even someone to approve the solution. With
Enhancement Pack 6, and delivered in S/4HANA, SAP has deployed
documented credit decision features.

In S/4HANA, documents that are blocked for credit are managed with
documented credit decisions. You can use transaction UKM_CASE to
recheck, release or reject blocked documents.

To display and maintain documented credit decisions follow the menu

path:

EASY ACCESS MENU • ACCOUNTING • FINANCIAL SUPPLY CHAIN • CREDIT

MANAGEMENT • DOCUMENTED CREDIT DECISIONS • CASES IN SAP CASE
MANAGEMENT • UKM_CASE

In Figure 5.1, you can see an example of a UKM_CASE display of

Documented Credit Decisions.

Figure 5.1: Display transaction UKM_CASE

 UKM_CASE

Note that this transaction can also display credit limit

requests.

UKM_MY_DCDS

This worklist-styled transaction can also be used to

review blocked sales orders. More details are found in
Chapter 8.

By selecting a Case ID, additional information can be seen in the

documented credit decision case, as shown in Figure 5.2.
Figure 5.2: Case details

Case display

These features are highly flexible, with many options

available as you customize your system. Therefore,
each implementation can have unique requirements
that are displayed in UKM_CASE.

My documented credit decisions

To access cases assigned to your SAP user ID, try the transaction
UKM_MY_DCDS.
5.2 Customizing activities
The technological basis for the Documented Credit Decision is SAP
Case Management, under the Record Management System ID:
UKM_CREDIT_CASE.

Please refer to the IMG documentation by following the menu items

shown in Figure 5.3.

Figure 5.3: IMG menu for Documented Credit Decision

6 Additional features
As we wrap up the Credit Risk Monitoring sub menu, let’s review
a few remaining features.

Menu path

Please continue to refer to Figure 1.6 and Figure 1.8

for the menu paths.
6.1 Credit limit request
This feature, like the Documented Credit Decision, is anchored in SAP
Case Management. The credit case can be used to manage credit
limit applications. Information can be transferred to the case from the
credit profile, and workflow can be leveraged to route the case in the
organization.

To display and maintain credit cases follow the menu path:

EASY ACCESS MENU • ACCOUNTING • FINANCIAL SUPPLY CHAIN • CREDIT

MANAGEMENT • DOCUMENTED CREDIT DECISIONS • CASES IN SAP CASE
MANAGEMENT • UKM_CASE

Navigation warning

Be sure to select the correct folder for your cases

once you’ve executed UKM_CASE.

The technological basis for the Credit Limit Request is SAP Case
Management, under the Record Management System ID
UKM_CREDIT_CASE.

Please refer to the IMG documentation by following the menu items

seen in Figure 6.1.
Figure 6.1: IMG menu for Credit Limit Request
6.2 Credit exposure update
In this setting, new credit exposure categories can be created (this
would also require use of a BAdI), and they determine how the
categories are considered in the calculation of credit utilization.
6.3 Processes
In this setting, you define any dependencies between different events
that can occur in the processing of SAP Credit Management and
processes of SAP Credit Management that are to be triggered when
these events occur.
6.4 Enhancements
As previously mentioned in Section 1.6, the Enhancement folder
contains a large selection of BAdIs which enhance the standard
features of FIN-FSCM-CR. Examples can be seen in Figure 6.2.
Please refer to the online documentation for specifics of each BAdI.

Figure 6.2: Enhancements

7 Integration with Accounts
Receivable
In this chapter, I highlight several settings relative to integration
with FI-AR.
7.1 Customizing activities
We are now working in the INTEGRATION WITH ACCOUNTS RECEIVABLE
ACCOUNTING AND SALES AND DISTRIBUTION S/4HANA sub menu (see
Figure 7.1).

Figure 7.1: IMG menu for integration with FI-AR in S/4HANA

If you are an ERP customer, your menu will be slightly different, as

shown in Figure 7.2.
Figure 7.2: IMG menu for integration with FI-AR in ERP

The single difference between these menus is clear—the S/4HANA

menu shown in Figure 7.1 includes an option to de-activate SAP
Credit Management, which by default is active here.

Of these settings, we will review two in detail: the assignment of credit

control areas to credit segments and to company codes.

Distributed landscape

If SAP Credit Management and FI-AR are not in the

same system, make these settings in the FI-AR
system.

7.1.1 Assign credit control area and credit segment

Since FI-AR and SD both make use of the characteristic credit control
area, it is important to relate this characteristic to the FIN-FSCM-CR
credit segment.

As discussed in Section 1.2, in SAP’s legacy credit system, the credit

control area represents the organizational structure for credit (see
previous Figure 1.1). The task here is to assign the credit control area
to a credit segment , as shown in Figure 7.3. Additionally, you
need to indicate if all company codes of the credit control area are to
be included . The update options are discussed in more detail
below.

Figure 7.3: Assign credit control area to segment

Figure 7.4: Credit update options

Use the dropdown to choose an update method, as shown in Figure

7.4. This selection controls when the document values of open sales
orders, deliveries, and billing documents are updated in FIN-FSCM-
CR.
7.1.2 Assign permitted credit control areas to company code
An earlier setting determined the default assignment, found under:

ENTERPRISE STRUCTURE • ASSIGNMENT • FINANCIAL ACCOUNTING • ASSIGN

COMPANY CODE – CREDIT CONTROL AREA

Here, we can make an additional assignment to the company code

(see Figure 7.5), which could be useful in properly reducing
commitments for unapplied customer cash.

Figure 7.5: Permitted credit control area—Company Code

7.2 Business process
As discussed in Section 1.7, FI-AR updates tables in FIN-FSCM-CR
with data needed for the open accounts receivable in order to affect
the commitment value and key performance indictors needed for
credit checking.

In the SAP application menu there are two programs to execute these
updates (see Figure 7.6). These must be executed in order for the
data to be current when credit decisions are being made.

Figure 7.6: Integration of Credit Management with FI-AR

Each of these programs must be executed on a timeline that supports

the upstream and downstream business processes of the data being
transferred.

7.2.1 Liability update

This program is used to transfer the open accounts receivable data
from FI-AR to FIN-FSCM-CR. The transferred data is then used in the
commitments value, which affects the credit limit utilization.

To execute this program, follow the menu path:

EASY ACCESS MENU • ACCOUNTING • FINANCIAL SUPPLY CHAIN • CREDIT
MANAGEMENT • INTEGRATION OF CREDIT MANAGEMENT WITH FI-AR •
ASYNCHRONOUS LIABILITY UPDATE -UKM_TRANSFER_ITEMS

Figure 7.7: UKM_TRANSFER_ITEMS

In Figure 7.7, we see that there are several options and input fields. In
the top section of the screen , you enter the company codes and
perhaps specific customer account numbers to be transferred. There
is also a checkbox for test run. In the lower section of the screen ,
you have an option to completely replace the table being populated
with this data. If this option is not selected, only data created or
changed since the last execution will be processed.

XI Messages

This program relies on the XI / PI / PO technology mentioned in

 Section 1.7.

Automate this program

The transfer can be done in real time. See SAP Note

1056821—“Immediate update of commitments from
FI-AR”.

Execution of this program updates the database tables UKM_ITEMS

and UKM_TOTALS. These tables are used to display the commitment
values on the Business Partner master data at the credit segment
level, as shown in Figure 7.8. You can use the DISP. LIABILITY icon to
get a list of the commitments that equal the CREDIT EXPOSURE value.
Figure 7.8: Credit Exposure, Business Partner

Once you’ve selected the DISP. LIABILITY icon, a list of open items
totaled by type or category is then displayed (see Figure 7.9). The
table UKM_TOTALS populates this report.

Figure 7.9: Credit Exposure, total

Examples of the SAP-delivered types, or categories, are as follows:

100—Open orders
200—Open Items from FI
400—Delivery Value
500—Billing Document Value

To view the details of one of the total by type lines, just double click
that line. As shown in Figure 7.10, the line items from table
UKM_ITEM are displayed. You can double click any line to see all
fields transferred from FI-AR . In the KEY field, you find a string
containing the company code, accounting document number, year,
and item number of the original FI-AR posted document.

Figure 7.10: Commitment, line items with details and key

 Report

In this example, we are starting from the Business

Partner. Use the report UKM_COMMITMENTS for
multiple Business Partners and additional reporting
parameters.

7.2.2 Key figure update

This program is used to transfer the key performance indicators from
FI-AR to FIN-FSCM-CR. These indicators are used in the credit
checking check steps, as discussed in Chapter 4.

To execute this program, follow the menu path:

EASY ACCESS MENU • ACCOUNTING • FINANCIAL SUPPLY CHAIN • CREDIT

MANAGEMENT • INTEGRATION OF CREDIT MANAGEMENT WITH FI-AR • UPDATE
KEY FIGURES FOR PAYMENT HISTORY-UKM_TRANSFER_VECTOR
Figure 7.11: UKM_TRANSFER_VECTOR

As shown in Figure 7.11 , there are several options and input fields. In
the top section of the screen , you enter the company codes and
perhaps specific customer account numbers to be transferred. There
is also a checkbox for test run. In the lower section of the screen ,
you have an option to completely replace the table being populated
with this data. If this option is not selected, only data created or
changed since the last execution will be processed. Additional
checkboxes support the transfer of cleared items, and for customers
with no items.

XI Messages

This program relies on the SAP NetWeaver XI /PI /

PO technology mentioned in Chapter 1.
 The transferred data updates the Business Partner
master data at the Credit Segment level.

For the use of each field, please refer to this topic in Section 3.1.4.
8 Integration with sales and
distribution
In this chapter, we highlight several settings relative to
integration with SD. Our focus is on the settings that support the
credit checking process.
8.1 Customizing activities
We are now working in the INTEGRATION WITH ACCOUNTS RECEIVABLE
ACCOUNTING AND SALES AND DISTRIBUTION S/4HANA sub menu, as shown
in Figure 8.1.

Figure 8.1: Integration with Sales and Distribution

Distributed landscape

If SAP Credit Management and SD are not in the same system,

make these settings in the SD system.
 If you have some experience with the original SAP
Credit Management features, these settings may look
familiar. SAP did not redesign these legacy SD
transactions; they are now found in the FSCM menu.

8.1.1 Assign sales area to credit control area

This is a relatively straight forward setting. It is a good example of how
SD was not re-designed; we have the credit control area as
organizational structure, with a sales area assignment, as shown in
Figure 8.2.

Figure 8.2: Sales area

8.1.2 Define credit group

The credit group manages how transactions are grouped with regard
to the credit checking process. Examples are shown in Figure 8.3.
Figure 8.3: Credit groups

8.1.3 Assign sales documents and delivery documents

In this setting, we make a connection between the credit group and
the business transactions for sales orders and deliveries.

In Figure 8.4, we can see SALES ORDER TYPES are assigned a CHECK
CREDIT indicator and a CREDIT GROUP .

Check credit indicator

You must use indicator D for FIN-FSCM-CR credit

checking.
Figure 8.4: Sales document assignment

Delivery documents can also be assigned these indicators if your

organization requires a credit check at that point.

8.1.4 Define automatic credit control

In this setting, we bring together the main indicators for when credit
will be checked.

In Figure 8.5, we see that the credit control area (CCAR), risk category
(RISK CAT.), and credit group (CG) are combined.

Figure 8.5: Define automatic credit control

By selecting an item, we can see the details of each combination.

Figure 8.6 shows an example of the first combination of A000/A/01. In
the CHECKS section of the screen we find the options for credit
checking:

SAP CREDIT MNGT check box—select this to use FIN-FSCM-CR

credit checking.
REACTION—determines what happens if the credit check fails: A for
warning, B for error.
STATUS/BLOCK check box—select this to have the block indicator
set the sales order status to blocked
Figure 8.6: Detail view

8.1.5 Define risk categories

During the automatic credit checking, the system calls up the risk
class from FIN-FSCM-CR and converts it to the risk category. The risk
category (as covered in Section 8.1.4) is used to determine when the
credit check is required. In this setting, the risk category is created and
assigned to a credit control area.

This is another example of how the SD configuration settings and

tables were not affected by FIN-FSCM-CR. The SD risk category
characteristic and the FIN-FSCM-CR risk class characteristic are
synonymous.

Risk category

For each risk class, you must create the same risk
category.
An example of this setting is shown in Figure 8.7.

Figure 8.7: Risk category

8.2 Business process
Now that we’ve reviewed the customization required to support credit
checking, let’s walk through the basic steps of credit checking. We
begin as if all Business Partner master data requirements have been
met, and the sales area and sales document have been correctly
configured, as shown in Section 8.1. The steps are as follows:

1. A Sales and Distribution sales order is entered at the sales area

level.
2. The system calls the risk class of the Business Partner in FIN-
FSCM-CR as the SD risk category.
3. If the system finds the:

credit control area (Credit Segment)

risk category (Risk Class), and
credit group (sales order, delivery, goods issue)

in the Automatic Credit Control, then the FIN-FSCM-CR credit

checking rule is carried out. The reaction and status are carried out as
per the Automatic Credit Control details.

4. If the credit check fails, someone in the organization must

determine the resolution.
Blocked sales orders can be managed by using transactions in the
SAP SD menu, such as VKM1 (see Figure 8.8). Here, you must select
the order(s) to be managed and then select an option to release,
reject, etc.
Figure 8.8: SD documents, transaction VKM1

If using the documented credit Decision (see Chapter 5), blocked

sales orders can be managed via transaction UKM_MY_DCDS. In the
example in Figure 8.9, we can see a worklist by Person Responsible
(or Credit Analyst), where orders can be reviewed and managed.

Figure 8.9: UKM_MY_DCDS—Documented Credit Decisions

You have finished the book.

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A The author

Marjorie Wright is an accomplished subject matter expert, author, and

speaker, and is the founder of Simply FI-CO, LLC, a boutique SAP
training consulting company. She is an education consultant in the
components of Financial Accounting, Management Accounting, and
Financial Supply Chain Management. With more than 25 years of
training and accounting experience across multiple industries—
including financial services, manufacturing, technology, utilities,
telecommunications and healthcare—Marjorie has conducted training
courses for more than 3,500 participants in both traditional face-to-
face classrooms and web-based virtual meeting rooms.
B Disclaimer
This publication contains references to the products of SAP AG.

SAP, R/3, SAP NetWeaver, Duet, PartnerEdge, ByDesign, SAP

BusinessObjects Explorer, StreamWork, and other SAP products and
services mentioned herein as well as their respective logos are
trademarks or registered trademarks of SAP AG in Germany and
other countries.

Business Objects and the Business Objects logo, BusinessObjects,

Crystal Reports, Crystal Decisions, Web Intelligence, Xcelsius, and
other Business Objects products and services mentioned herein as
well as their respective logos are trademarks or registered trademarks
of Business Objects Software Ltd. Business Objects is an SAP
company.

Sybase and Adaptive Server, iAnywhere, Sybase 365, SQL

Anywhere, and other Sybase products and services mentioned herein
as well as their respective logos are trademarks or registered
trademarks of Sybase, Inc. Sybase is an SAP company.

SAP AG is neither the author nor the publisher of this publication and
is not responsible for its content. SAP Group shall not be liable for
errors or omissions with respect to the materials. The only warranties
for SAP Group products and services are those that are set forth in
the express warranty statements accompanying such products and
services, if any. Nothing herein should be construed as constituting an
additional warranty.
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