Credit management system

Credit Management Migration in SAP S/4HANA CloudCredit Management Migration in the SAP S/4HANA Cloud, which involves transferring data from your legacy system to the S/4HANA Cloud system. Specific aspects of this migration process include Credit Management profile data and segment data.Migration is a crucial phase when moving from a legacy system to SAP S/4HANA Cloud, ensuring that all relevant data is correctly transferred and the business processes are seamlessly continued in the new system. SAP S/4HANA Cloud customers can take advantage of a template-based migration approach built into SAP S/4HANA with rapid data migration to SAP S/4HANA. SAP S/4HANA Cloud supports a limited set of data migration objects, with support for additional objects planned for later inclusion.The available migration templates are as follows:Credit management profile dataCredit management segment dataCredit Management Profile DataCredit Management profiles are configurations that define how credit limits, risk categories, and credit check rules are managed for customers. During migration, it's essential to correctly transfer this data to maintain consistent credit management policies and methods.What to Migrate: Credit Profiles: These include settings for credit checks, risk categories, and strategies for handling credit limit breaches.Credit Check Rules: Rules defining scenarios where credit checks are triggered (e.g., during order creation, delivery).Risk Categories: Categorization of customers based on their perceived credit risk (e.g., low, medium, high risk).Migration Process:Data Extraction: Extract existing credit profiles and related data from the legacy system.Data Transformation: Transform and map data to ensure compatibility with the target S/4HANA environment.Data Load: Load the transformed data into the S/4HANA Cloud using tools like the SAP S/4HANA Migration Cockpit.Validation: Validate the migrated data to ensure that the profiles align with the intended business logic and policies.Benefits: Consistency: Ensures that credit management policies remain consistent post-migration.Seamless Transition: Facilitates a smooth transition without disrupting credit management operations.Credit Management Segment DataCredit Management segment data refers to the division of customers into segments based on specific criteria, which can affect how credit limits and risk levels are managed. Migrating this data accurately is essential for maintaining tailored credit management strategies.What to Migrate: Customer Segments: Data about how customers are segmented for credit management

Purposes.Segment-specific Credit Limits: Credit limits set specifically for each segment.Segment-based Risk Parameters: Specific risk parameters assigned to each segment.Migration Process:Data Extraction: Extract segment data and associated credit limits from the legacy system.Data Transformation: Transform and map the extracted data to fit the structure and format required by S/4HANA Cloud.Data Load: Use migration tools to load the transformed segment data into the SAP S/4HANA Cloud.Validation: Validate that all customer segments and corresponding data are accurately replicated in the new system, ensuring the continuation of segment-specific credit policies.Benefits: Tailored Credit Management: Ensures that customer segmentation and associated credit management practices are carried over accurately.Risk Optimization: Maintains effective risk management strategies by ensuring segment-specific rules and limits are preserved.Summary of the Migration ProcessPlanning: Identify all elements of credit management that need to be migrated.Define the mapping between the legacy system and SAP S/4HANA Cloud structures.Data Extraction:Extract data from the legacy system using extraction tools or scriptsData Transformation: Transform and cleanse data to ensure it meets the requirements of SAP S/4HANA Cloud.Map legacy data to the corresponding data structures in SAP S/4HANA Cloud.Data Loading: Use tools like the SAP S/4HANA Migration Cockpit to load data into the SAP S/4HANA Cloud.Ensure data is loaded systematically to avoid errors and disruptions.Validation and Testing: Validate that all data has been correctly loaded and that the credit management profiles and segments function as expected.Perform thorough testing to ensure business processes in credit management continue to operate smoothly.Go Live and Support: Once validated, proceed with the go-live process.Provide support to address any issues or adjustments required post-migration.ConclusionMigrating Credit Management data to SAP S/4HANA Cloud involves meticulously transferring both credit management profile data and segment data. This ensures that your credit management strategies and customer-specific credit rules continue to operate effectively in the new system. By following a structured migration process planning, data extraction, transformation, loading, validation, and testing you can achieve a smooth transition and maintain robust credit management practices.

This blog post will provide an overview of Credit management function in SAP S/4 HANA.Before moving into details, let's see some of the differences between ECC and HANA with regard to Credit management.Credit Management (CM)ECCS/4 HANACM comes under Sales and Distribution moduleCM comes under Financial Supply Chain ManagementRelevant master data is the customer in SAPRelevant master data is BP in SAP with a separate role for CMCredit exposure is monitored at credit control area levelCredit exposrue is monitored at credit segment levelCredit limit rules are not availableCredit Rules engine is availableNo connectivity to 3rd party Risk rating systemsConnectivity is available Master data for Credit ManagementIn S/4 HANA, the credit management master data is maintained in BP master data. For this, we need to create a new role as Credit Management under the relevant BP. Once you create the credit management role, you can see there are two parts activated for CM. We maintain all the CM related data within these two sections. Credit profile Credit Segment dataCredit ProfileThe credit profile contains four main sections namely; Scoring External Credit Information Further Information1. Scoring1.1 RulesCredit rules are defined in the system in order to calculate the credit limit and the score. In the configuration path below you can create the rules to calculate credit limit and score with user defined formulas1.2 ScoreScore is calculated by the system based on the formula defined in the above configuration path. The calculated score can be overwritten with manually entered values.1.3 Risk ClassYou can create risk classes in the below configuration path. We can assign the score ranges to each risk class, once the score is calculated by the system, the risk class will be picked automatically in the master data. 1.4 Check RuleHere we can define how the system should check the credit exposure of a particular customer. There are three main ways of checking this.1.4.1 Statistical check - With this credit check system will consider all the open sales orders/open delivery/open billing/open FI documents in the system and calculate the credit exposure.1.4.2 Dynamic Check - With this credit check system will consider all the open sales orders/open delivery/open billing/open FI documents in the system and calculate the credit exposure. But the open items will be limited depending on the time horizon we define in the system. Ex: If the horizon period is 1 month, system will check all the open documents mentioned above which

Selling products or services to other businesses can be slightly more complex than selling to consumers. Many businesses will need to set up specialty accounts for their clients to handle large standing orders, extending lines of credit as needed. And as soon as you take a plunge into the waters of extending credit, you’ll need a strong management system to track payments and handle collections. This is why B2B credit management is an essential component of the accounts receivable process.What is B2B credit management?B2B credit management is a far-reaching term used in accounts receivable to describe the process of collecting payments between companies. Because payment processes can vary widely between businesses, the specific activities included in B2B credit management will depend on your industry. However, typical activities to manage include:Managing cash flowApproving customer credit applicationsEstablishing a credit policySetting up recurring card paymentsHandling late paymentsDealing with customer defaultsSome businesses choose to handle this process in-house, while others will outsource to specialty B2B credit management companies. Mainstream accounting software also helps streamline the management process so you can ensure smoother payment collections.Features of a B2B credit management systemThere are several aspects of credit management to consider as you get started. Ask yourself the following questions before you start to compare B2B credit management companies.How will you assess customer credit risk? You’ll need to look at business credit ratings by pulling reports from the main credit agencies. Most businesses will also want to see a comprehensive application with financial details before making any decision.How will you extend credit? What will your limits be, and how will you apply these to new customers? B2B credit management involves setting deadlines and collecting payments as well. You need to define these terms in advance.How will customers access their accounts? It’s a good idea to set up an online portal where customers can interact with your business, check their accounts, and make online payments.How will you keep accounts secure? Comprehensive B2B credit risk management not only involves protecting your company from default, but also protecting your customers from fraud.These are just a few of the examples of features to look for in any credit management system.Establishing a credit policy for your businessWe’ve mentioned the importance of creating your own credit policy above. This builds a strong foundation for any credit management system. Customers are most likely to make timely payments when they understand all terms and conditions

Services CardWorks Carmel Financial/New Coast Direct Cavalry SPV I LLC CBCInnovis CBCS Collections CBE Group CBV Collections CCB Credit Services CCS Collections CCS Offices Central Mediation Services Central Portfolio Control Cerastes LLC Choice Recovery Choice Recovery Inc CKS Financial Client Services CMRE Financial Services COAF Coast Professional Comenity Bank Debt Collection Commonwealth Financial Consumer Collection Management Contract Callers Inc Convergent Healthcare Recoveries Convergent Outsourcing Couch Conville & Blitt Covington Credit CRDT First Credco in Court Credence Resource Management Credit Bureau Systems Credit Control Corporation Credit Management Company Credit Management LP Credit Systems Credit Systems CSIEZPay CTC Debt Collector CVCS Debt Collection Cypress Financial Recoveries D&A Services Daniels, Norelli, Cecere & Tavel P.C. DCM Services Debt Recovery Solutions Delanor Kemper & Associates Department Stores National Bank Direct Recovery Associates Discover Collections Diversified Consultants Diversified Recovery Bureau DNF Associates, LLC Dodeka LLC DRS Credit Eagle Loan Eagle Accounts Group, Inc. Eastern Account System EduCap Ellington and Associates Collections Encore Capital Group Enerson Law Enerson Law LLC Enhanced Recovery Company EOS CCA ERC Collections ERSolutions Estate Information Services Equable Ascent Financial Everest Business Funding Executive Credit Management Falls Collection Service Factual Data FBCS FCO Collections and Outsourcing FIA Card Services fin rec svc (Financial Recovery Services) First Federal Credit Credit Control First Financial Bank First Portfolio Ventures LLC First Progress FirstPoint Collection Resources Firstsource Advantage FMA Alliance FNB Omaha Forster & Garbus Franklin Collection Services Freedom Plus Freshview Solutions Frontline Asset Frost Arnett Fulton Friedman & Gullace LLP Galaxy International Purchasing, LLC GC Debt Collection GC Services General Revenue Corporation GLA Collections Glass Mountain Capital Glasser and Glasser Global Credit Collection Corp GMAC Financing Golden 1 Credit Union Grant Mercantile Agency Gulf Coast Collection Bureau Gurstel Halsted Financial Services Harris and Harris Harvard Collection Harvest Credit Management Helvey and Associates Hollis Cobb Holloway Moxley Hosto Buchan Howard Lee Schiff HRRG Hudson & Keyse LLC? Hunter Warfield IC System Impact Receivables Management Innovative Recovery Integras Capital Recovery LLC Javitch Block JHPDE Finance 1 LLC JP Receivables Management Partners JPMCB card Kenneth Eisen and Associates KeyBank student loans Kirschenbaum, Phillips & Levy P.C. KLS Financial Services Kramer & Frank Lakeside Collection Lending Club Lincoln and Morgan Kabbage Linebarger Goggan Blair & Sampson LLP Lockhart Collection Agency LJ Ross Associates LTD Collections Malcolm S. Gerald and Associates Malen & Associates Mandarich Law Group Mannbracken MARS Inc. Collections MBA Law McCarthy, Burgess & Wolff Meade & Associates

Belong to the last 1 month only. Items older than that period will not be considered.1.4.3 Default - All checks active - In default check, system will consider the open sales order value and billing documents posted to FI but not paid by the customer yet. 2. External Credit InformationYou can maintain the customer credit ratings provided by the external parties in this section. For this you need to create the rating procedures in the system ex: Moodys, and define the ratings given by them. 3. Further InformationUnder this section you can maintain all types of collaterals maintained by the customers like guarantees/insurances/exception for credits etc. In the below table you can maintain this data with the amount and validity period. You can mark "Relevant for credit check" if you need to include the collateral during the credit check.Credit Segment DataThe most important data under this section is the Credit Segment. Credit Segment represents a seperate unit under credit management which can be defined based on the business area and other credit management controls for each business area. For an example if you have multiple sectors in the business as Agriculture, Retail, Services you can create separate credit segment for each of this business area. Else you can create one credit segment for the entire company.There is a main credit segment which will be assigned to the customer by default. You can define other segments with different credit limits which will be under the main segment.Credit LimitYou can manually provide the credit limit for the customer instead of allowing system to calculate the limit using the credit rules and formulas.You have the option to simulate the credit check and see how the system will calculate the credit exposure with different credit limits. (Yellow highlighted icon). Credit exposure will show the current open document value of the customer compared with the credit limit, and the utilization as a %.Display liability option will give an overview of the credit exposure with a breakdown of the open documents and its value. So that it will be easy for you to know what the open documents are considered for the credit exposure of a particular customer.The above is a basic overview on SAP S/4 HANA credit management master data. Hope this article will help for the beginners who are interested in this topic.