SAP BLOG Documented Credit Decision/Credit Decision for Document – SAP S4Hana Credit Management

Introduction:​

Credit Management is a process in which Company sells a product/service to customers on a credit basis. The company collects payments from customers at a later time, after the sale of the product. The amount of credit fixed by a company for a customer is called a credit limit. The customer can purchase the product from a company within the credit limit, and when the credit limit is crossed, the order is blocked by the system.

The creditworthiness and payment behavior of your business partners have an immediate effect on the business results of your company. Efficient receivables and credit management reduce the risk of financial losses and help you to optimize business relationships with your business partners. SAP Credit Management (FIN-FSCM-CR) supports your company in determining the risk of losses on receivables from your business partners early and in making credit decisions efficiently and in some cases automated. With SAP Credit Management (FIN-FSCM-CR) you can operate centralized credit management. The business systems connected (for example Sales and Distribution, Logistics Execution, and Financial Accounting) report the commitment of a business partner to SAP Credit Management.

Credit Decision for Document:​

If the credit standing check has a positive outcome and the credit line is to be adjusted, SAP Credit Management initiates a credit limit request. In the case of a negative result, the system generates a “Documented Credit Decision” which can be used in credit management to check whether credit can still be granted. In contrast to the credit limit request, a document or account is blocked in the process.

A dual, triple, or quadruple control principle can be configured for the initiated workflow. In addition, documents, notes, and documents can be attached, providing for plausibility and transparency throughout the credit decision.

The former procedure for blocked orders via transaction VKM1 can continue to be used but is being replaced successively by the Documented Credit Decision process.

The responsible credit officers can check, approve or reject the Documented Credit Decision via the TCodes SCASE or UKM_MY_DCDS and leave a note. The sales staff access the web-based customer credit information via the “Display Credit Master Data” app (TCode UKM_BP_DISPLAY).

To use the new SAP Credit Management, the component must be enabled in Customizing using the Business Add-In (BAdI) UKM_R3_ACTIVATE. FSCM also requires the configuration of the communication between the system components Sales and Distribution and SAP Credit Management. To do this, BAdI BADI_SD_CM must be enabled.

Prerequisite:


Before activating this function, you should first make sure that the Workflow user: SAP_WFRT is active and have the required standard authorizations



Click on Display. There You can find the user which was active.





Configuration Steps for Case Management Component:

SAP Credit Management uses the component Case Management as a technical basis for the processing of the following objects:

• Documented Credit Decision
• Credit Limit Request

In this Customizing activity, you can find a summary of the activities that you have to execute for this in the Case Management component.


Step 1: Attribute profile

In this activity, you define which attributes you want to use for the documented credit decision. You also define the display and maintenance properties of the individual attributes. If you also want to use customer-specific attributes for the documented credit decision in addition to the standard attributes.

Create Attribute Profile:


Execute Create attribute profile.



Click on New Entries to create a new attribute profile for the documented credit decision.



Fill in the following data shown in the below image. And click on save.




Click on Attribute Group and fill in the following data shown in the below image and click on save.



Click on Assign Attribute and fill in the following data shown below table and click on save.




Click on the save Button.



Create Values for the Attribute “Priority”




Fill in the following value shown in the image and click on save. The following value helps us to indicate the priority of the case created for the Credit Decision for Document.



Create Values for the Attribute “Reason for Escalation”




Fill in the following value shown in the image and click on save. The following value helps us to indicate the escalation reason of the case created for the Credit Decision for Document.



Assign Reasons for Escalation to an Attribute Profile:




Fill in the Attribute Profile Created in the above step and click on the Tick button.



Add the escalation Reason created in the previous step and click on save.



Step 2: Status profile

In this activity, you can define the various status forms and the changes from one status to another that you require for documented credit decisions.






Click on New Entries and Create a new Status Profile and click save.



Navigate to Status Value.



Click on Status Value and fill in the following data shown in the table and click on save.


After adding the value. click on save. The below value will act as a status for the Credit Decision for Document. The responsible person will change the Credit Decision for Document Status based on the business need.





Step 3: Number range




Click on Intervals to define the intervals for the Documented Credit Decision Case.



Define the interval and NR Status for the Documented Credit Decision Case.





Step 4: Case Types

The following case types are contained in the standard system for SAP Credit Management: Documented Credit Decision (FDCD).

Define Case Types




Fill in the following data to create a case type for a Documented Credit Decision and click on save.



Assign the number range which was created in the previous steps.





Navigate to Customizing for Case Copy and fill in the following data shown in the image and click save






Create Values for Attribute “Category”.






Create an Attribute Category and map it to the case type and save it.










Create Values for the Attribute “Reason”.








Create an Attribute reason and map it to the case type and save it.

Configuration Steps For Documented Credit Decision:​

1. Create a Profile for Case Search

Create a New Profile for Documented Credit Decisions.



Navigate to Selection Fields:





Fill in the following data shown in the below image and save it.










Navigate to Modifiable Fields:

Fill in the following data shown in the below image and save it.

Define Status for Automatic Closing:​

You have defined the status in the status profile. In Customizing of Case Management, choose Create Status Profile. Make sure that the following settings have been made there:
•The status can always be set.
•The status is assigned to the following System Status: Closed (007)

Define Case Types for Documented Credit Decisions:​

You define which case types the system should use for the creation of documented credit decisions.

1. 
   1. Credit decisions for documents

• • • 
      This kind of credit decision is used, for example, to document the credit block of a document from
  
  Sales and Distribution (SD).

Fill in the above details and click save.

Define Approval Process​

Define the process for the release of documents that have been blocked for credit reasons. It enables you to ensure that only authorized persons can release a document. This approval process relates only to the release, and not the rejection of such documents.

Define the threshold values for the release in ascending order. Note the following details when doing so:

• You can make a maximum of four entries for each combination of credit segment and risk class. The first entry relates to the credit analyst and is used to provide a better overview. You can also omit it, as it is automatically taken into account by the system.

• If you define the credit segment, but not the risk class, then the corresponding entry applies to all the risk classes of the credit segment.

The credit analyst is responsible for ensuring that the approval process is adhered to. The following fields are available to him or her in the documented credit decision for this purpose:

• Person responsible

• 
  Once he or she has entered the name of the person responsible, the person responsible can see the entry in his or her own worklist and can release the document there directly.

• Approver and Status

• • • 
      These two fields apply in cases where an additional approver
  
  is required in addition to the credit analyst or person responsible. Either of them enters the name of the additional approver here and requests a decision from him or her. As this does not usually involve a user of this application, the credit analyst or person responsible also enters the result of the decision. He or she then either releases the document or rejects it.

• Approver 2 and Status 2

• • • 
      These two fields apply in cases where two additional approvers
  
  are required in addition to the credit analyst or person responsible. The procedure is along the same lines as the case described above, but with an additional approver.

PDF Form for Snapshot – Assign:​

You assign the PDF forms that you want to use for your snapshots. A snapshot shows the data that forms the basis of a negative credit decision. You can specify a second form, parallel to the official form, that is only used for internal purposes and so can contain additional information.

1. Assign a form to each combination of Case Type and Rule for Calculating Scoring and Credit Limit.

2. To enter an internal form for a particular combination, create a second entry and set the appropriate indicator.

Configuring Event Manager For DCD:​

Display the object type CL_UKM_DCD_WF_EVENT and make sure that the field Linkage Activated is active.

Test Case:​

Maintain Master Data:​

Note: The credit Exposure of the customer is above the Credit Limit.

Maintain the relationship between Credit Analyst and business partner.

Relationship category => in Credit Management is managed by.

Create Sale Order:​

Sale Order Number => 378.

Credit Status of Sale Order :​

Below image shows a sales order blocked for credit and a DCD created as a Case

Documented Credit Decision:​

Approving DCD:​

In real life, this DCD should be approved by a credit manager/analyst i.e, not by the person creating or working with a sales order. The task of creating the DCD is delegated to the generic workflow user (SAP_WFRT) to avoid the requirement of credit management authorization to a salesperson.

Credit Status of Sale Order :​

The below image shows the credit status of the sale order released.

Conclusion:

By following the above steps you can activate approvals for Documented Credit Decision with simple configurations.

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