CM – 1. Purpose

Credit Management – 1. Purpose

The need of Credit Worthiness of the Customer, Credit Assessment and the Challenges in managing Credit
• Inconsistency in credit policy: No single source of truth and the information is spread across the organizational systems. Hence within an organization, there is a possibility of a customer getting treated differently by different business units
• Cross-department collaboration: For Credit decision the information required is spread across various departments and communication between sales, credit, and finance department. Getting this information and processing the unstructured info is extremely time-consuming.
• Treatment of new customers: an organization does not have in-house score of a partner who is new customers

SAP Solution:
Historically SAP had two solutions for Credit Management :

(a) FI-AR Credit Management and

(b) SAP Credit Management – THE FSCM Credit Management
The ECC Credit Management triggered thru SD using FI-AR is obsolete and no longer supported in S/4HANA. (We refer this as Classical Credit Management)

The FSCM Credit Management (a High-End Solution from SAP), as add-on or as stand-alone side-car deployment is possible.  (We refer this as High-End Solution Credit-Mgmt)

In Digital Transformation, the new world, for processing of Receivables Management,
In SAP S/4HANA, BASIC Credit management,  based on technical foundation of FSCM Credit Management is made available.

In SAP S/4HANA No additional license is required for using “BASIC” Credit Management solution even if it is technically based on FSCM Credit management.
However to use additional functionality like scorecards, automatic determination of limits, workflow, integration of external credit information, Client must acquire License. Lic. is Client specific and related info needs to be checked with Client and SAP respectively.