Credit Check for hierarchical group of customer!

[Santosh_Jha1]

Use Case:

Credit check for a group of customers: many times, an organization wants to do credit check at a group level, when the customer is group of organization having multiple sub-units. This scenario arises when the customer is a holding company having more than one subsidiary and the seller company wants to maintain a floating credit limit for the subsidiaries and an absolute limit at the holding company level.

Example:

In the table at the group level the credit limit is USD 160, and this is total of the credit limits at the subsidiary level. The idea is when one of the subsidiaries run out of credit the credit analyst can manually adjust the limit to the extent of available limits with the other subsidiaries and yet the total limit at the group level remains at USD 160. Credit limits for a BP can be maintained in the app ‘Manage Credit Accounts’. 

Master Data Setup and Configuration:

The group structure can be maintained by defining the BP relationships: maximum 10 levels of hierarchy can be maintained. This hierarchy can also be imported via an excel sheet. The data must be maintained in the template provided in the app ‘Import Credit Account Hierarchies’. The relationship categories being used here are ‘Superordinate Credit Account From’ and ‘Subordinate Credit Account To’.

Once we maintain this relationship for the Superordinate Credit Account From, the relationship for the Subordinate Credit Account To is automatically maintained in the system, as shown in the snapshot:

The credit account hierarchy can also be seen in the app ‘manage credit accounts’ under a credit segment:

Test the scenario:

Our objective is to block a sales order (SO) not only at the sub-unit level but also at the group level in case the credit limit fails. Usually, the group level credit limit is higher than the individual units and the credit analyst keeps a floating limit for the sub-units to maximize the sales.

When we create an SO for a subunit the credit limit is not only checked at the sub0unit level but also at the group level.

Case: When the credit check fails at the sub-unit level but not at the group level. In this case the credit analyst can manually adjust the credit limit of the entire group keeping the group level limit same and yet approve the SO at the sub-unit level:

Case: When credit check fails for sub-unit as well as at the group level: in such cases the SO cannot go through and needs other measures to release the case.

Note: the messages in the above test cases appear after changing the total SO value (to demonstrate both the cases).

Conclusion:

It is possible to perform a credit check at a group level for complex group structure kind of customers. However manual adjustments for maintaining the floating credit limits are required, nonetheless it serves the purpose!