Authorization Strategies for Credit Release Processes, Chain Sales, and Distribution

  • by Diony J. Ruiz R., SAP Architect and Senior Consultant, Group Intellego
  • February 1, 2016
Set up and configure an authorization strategy for credit representatives based on two guidelines: how much of the available credit limit a customer has used and the value of a particular sales order or delivery.
Learning Objectives

Reading this article, you’ll learn how to:

  • Customize credit management by maintaining authorizations
  • Create role maintenance authorizations
  • Create master data for customer credit management
  • Release a blocked sales and distribution (SD) document
Key Concept
Authorization objects control release processes for credit on commercial documents in sales and distribution (SD) based on authorizations for the net value of sales orders, or the percentage of available criteria such as customer credit.

The authorization processes for sales documents in in Credit Management/Risk Management in SAP sales and distribution (SD) usually do not have allocation strategies for the persons responsible for their release. However, companies need a strategy for the release of sales documents that are blocked for credit under the criteria of the value of the document or risk factors associated with the customer. You can configure these criteria in SD.

For example, a representative may be authorized to process credit holds for customers within a particular risk category in which total credit exposure is below 80 percent of the allowed credit limit. For customers whose credit exposure is approaching 100 percent of their credit limits (in other words, becoming potentially critical), you may want to direct credit holds to senior credit personnel as shown in Figure 1.


Figure 1
An example of authorization according to credit limit

In another example, a group of representatives may be authorized to process credit holds for documents whose value is less than 500,000 USD. However, only the group’s manager can authorize credit for documents with values of over 500,000 USD as shown in Figure 2.


Figure 2
Example of authorization according to document value

In Credit Management/Risk Management, basic customizations are necessary. I focus on customizing based specifically in Credit Management/Risk Management Settings > Maintain Authorizations within SD.

Prerequisites

There are two prerequisites to complete customizing in Credit Management/Risk Management Settings > Maintain Authorizations:
•    Define Credit Control Area. The credit control area is an organizational unit that specifies and checks a credit limit for customers. Settings are in the SAP Financial Accounting (FI) module.

•    Define the automatic credit control. Settings are in the SD module. The automatic credit check can target certain aspects during a check and run at different times during order processing. In this activity, you can define your own credit checks to correspond to your requirements in the area of Credit Management.

To configure advanced authorization strategies in credit, you need to make the following settings in customizing.

Diony J. Ruiz R.

Diony J. Ruiz R. is an SAP architect and senior consultant at Group Intellego. He has 12 years’ experience in SAP Sales and Distribution and SCE (Supply Chain Execution), Logistic Execution (LE), transportation, and warehouse management picking. He has additional knowledge in SAP MM (Materials Management).

He has worked in industries such as manufacturing, pharmaceuticals, logistics, third-party logistics distribution, services, public government, chemical, maritime and customs, metallurgy, automotive, and mining industries.

His roles have included SAP Consultant Specialist, Project Leader, and Area Leader.

He is an SAP Certified Professional.

 

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