About Default Credit Limit for new Business Partner

According to traditional credit management, the default credit limit can be set per the Credit Control Area once a new customer has been created. But how to achieve the same after moving to FSCM?

How to set a default credit limit?

Generally, there are few approaches to setting the default credit limit at FSCM to my knowledge.

  1. Update directly at UKM_BP manually or DB update by the program when data migration;
  2. Maintaining formulas for Calculating the Credit Limit (SPRO -> Fin. Supply Chain Management –> Credit Management –> Credit Risk Monitoring –> Master Data ) and then run UKM_MASS_UPD3 which will calculate the credit limit based on the Rule for credit Limit. Btw, BADI UKM_EV_FORMULA can be used to enhance fields and functions in the formula editor.
  3. Create a Credit Limit Request manually through a credit case by SCASE and get it approved.

But there are a few drawbacks obviously for the above two approaches.

  • The defined credit formula requires lots of inputs like Score relies on Net income/Revenue which could be not accurate or not available at all.
  • The calculated credit limits could be not the credit limits the user desired.
  • The credit limit request needs extra approval.
  • External credit agency information can help with Credit limit calculation but it’ll be more complex and manual work involved.

In other words, it’s hard to set any credit limit as default quickly and automatically. Maybe it’s per design, as the default credit limit should not be updated freely without any control.

The New Requirement

Recently got one new request related to the default credit limit for a new business partner:

  • In some business scenarios, the user needs to place 1st order with newly created customers directly once this new business partner has been created. At that time, the default credit limit hadn’t been updated yet. The credit team has no time to update manually immediately when a new BP has been created.
  • The Credit checks during order creation should use the credit limits as the traditional credit management which is stored in table T014 per credit control area/segment.
  • Because the user could place several orders after BP has been created immediately. After the credit limit has been set, no approval should be required as it could take days to get approval.
  • The credit check could fail but at least shouldn’t blocked by a zero credit limit for this BP.
  • Users/credit teams could set a credit limit later to overwrite this default credit limit from T014.

The possible solutions

As the credit check will perform the check steps defined in the check rules, the idea is to try to replace the zero credit limit during the credit check. The referenced one is standard UKM_CHECK_010 of UKM_CHECK_STEP (Individual Step of Credit Check).

Here are a few points that need to be mentioned:

  • It’s not recommended to change the standard UKM_CHECK_010 step as it’ll be shared which is too risky, and this approach will be rejected as well~
  • Creating a new credit step and putting it into the credit check rule for new customer after the UKM_CHECK_010 step is also not workable, as the system already fetch the credit limit and compare it with the current value which will leave the check log with ZERO credit limit. So it’s too late if the new step is processed along with the 010 step.
  • Single individual credit check steps can change the whole check result including all previous steps but can’t impact the following steps unless it’s the last step.
  • For multiple usabilities for BADI Definitions against UKM_CHECK_STEP, the check steps follow the sequence defined by the check rule, so no need to be concerned about this sequence issue:

Multiple use for BADI definitions means that there can be several active BADI implementations. When there is a call, they are all called up – however, in an unpredictable sequence.

So maybe the possible solution is:

  1. Create a new check rule with a new check step refer to 010 and do not use 010 for this check rule.
  2. Other customized check steps are still needed, watch out for the check-step sequence inside the check step as the check-step log will show following the check-step sequence.
  3. Get the credit limit from T014 by control area equal to io_account->a_credit_sgmnt;
  4. Add credit limit replacement logs through cl_ukm_credit_checker=>add_reason;
  5. Have to update the credit limit ukmbp_cms_sgmcredit_limit directly at the DB level cause if use CL_UKM_ACCOUNT->SET_BP_CMS_SGM will not update the credit limit which requires extra approval.

The final check log looks like the following:

Please kindly comment if you’re a better approach to achieve the same, thanks : )

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