Basic Credit Management (BD6): Exlcude a payment term (prepayments) from credit limit calculation

[Simon__R]

Hello SAP Community,

Using Basic Credit Management (BD6) for S/4HANA Cloud Public Edition 2408. I would like to know if it is possible to exclude a specific payment term from the credit limit calculation.

Specifically, we want to exclude a specific payment term for payments made in advance (prepayments).
Our goal is that a sales order created with this payment term will never be cheked against a customer's credit limit.

Thank you for your help.

Best regards,

Simon

[AndreasMuno]

Hi @Simon,

perhaps the Business Partner of the customer may have to be flagged for exemption from credit checks as they are not an actual "creditor", they prepaid, right?    

Aren't prepayments already automatically excluded from automated credit checks? AFAIK, only payment conditions which actually require credit are subject to checks. Did you have a different experience? Please let us know. Thank you.

@LilingJia, @Ulrich_Hauke could you have a look, please, or bring some other senior colleague(s) in? Simon got back to me saying, the payment condition that is configured for pre-payments always gets processed in the credit check. In my professional opinion, only payment conditions which actually require credit should be subject to credit checks. There are no credit checks when paying in cash, either. From my point of view, credit checks are there to reduce the risk of the other party of receiving payment. If they already got paid in advance, what's the point of a credit check, right? But I may be missing something else entirely.  Thank you, Uli and Liling!

[HenrikeGrötecke]

Thanks for your question. It has been forwarded to the experts.

[Simon__R]

Hello Experts,

I believe I have partially solved the problem by using a billing plan with a 100% downpayment. As a result, the sales order no longer counts against the credit limit.

However, this has opened another issue for us:

The incoming downpayment seems to reduce the customer's credit exposure, regardless if the related sales order was a prepayment sales order or not.

For example:
Let's assume a customer has a credit limit of €200,000 and we create two sales orders for this customer.

1. Sales Order 1001: A regular sales order valued at €100,000 with NT30 (30 days net) payment terms. This utilizes 50% (100.000/200.000) of the credit limit as expected.

2. Sales Order 1002: A sales order valued at €100,000 with a 100% downpayment request billing plan. This is initially ignored by credit management.

However, when an invoice from sales order 1002 for the downpayment is created and the payment is received, the customer's credit exposure is reduced temporary to €0. Only after the delivery and the final invoice from sale order 1002 is created does the credit exposure increase back to the correct value of €100,000 (from NT30 sales order 1001).

This is problematic for us because, during the period between the payment and the delivery, it appears that the customer has €0 credit exposure. In our case, there can be a significant time gap between these two points, making it difficult to maintain an accurate overview of the actual credit exposure at any given time.

I was hoping that the incoming downpayment, marked as a prepayment, would not alter the existing current exposure of the customer.

Do you have any recommendations on how this issue can be avoided?

Thanks in advance

Simon

[OwenLiu]

Informed expert