Credit Control Area
Definition Credit control area is an organizational unit that represents the area where customer credit is awarded and monitored. A credit control area contains credit control information for each customer and provides credit management at this level. This area awards and monitors credit to customers.
Usage The credit control area is used for credit management in the application components Accounts Receivable (FI-AR) and Sales and Distribution (SD).
The usage of Credit Control depends on whether credit will be monitored specific to a company code or across company codes.<span “font-size:13.5pt;=”” color:black”=””>
In case of centralized credit management requires assignment of company codes to one credit control area. In case of decentralized credit management scenario, every company code is assigned to different credit control area.
Defining new Credit Control Area
IMG Path: Enterprise Structure > Definition > Financial Accounting > Define Credit Control Area
Upon opting for the above path, system navigates you to the screen for creation of Credit Control Area. This screen contains various fields, given below is the list of fields with explanation.
Currency Enter the currency in which credit should be monitored<span “font-size:=”” 13.5pt;color:black”=””>
Update The credit update controls when the values of open sales orders, deliveries, and billing documents are updated. System comes with Update Group 000012 configured. This group works as below:
Sales order – Increases open order value from delivery-relevant schedule lines
Delivery – Reduces open order value from delivery-relevant schedule lines – Increases open delivery value
Billing document – Reduces open delivery value – Increases open billing document value
Financial accounting document<span “font-size:13.5pt;=”” color:black”=””> – Reduces open billing document value – Increases open items
Apart from above fields, default values can be defined here for Risk Category, Credit Limit.
Assignment Once we have created a new Credit Control Area, we have to assign the same to relevant Company Code
IMG Path: Enterprise Structure > Assignment > Financial Accounting > Assign company code to credit control area
Note: Do not forget to discuss with your Sales & Distribution (SD) consultant for further configurations related to credit check.