FSCM - Credit Limit Requests Approval using Manage Credit Management Rules

[darrelzaulda]

In this blog post, we will cover the steps to set up the approval process for credit limit requests using the Manage Credit Management Rules app and notifications using the Situation Handling: Approve Credit Limit Requests. The information presented here, and screenshots are from SAP S/4HANA 2022 Best Practices CAL instance.

Depending on the business requirements, the definition of the approval hierarchy and conditions will vary. A business partner with role UKM000 - SAP Credit Management must exist to proceed. The information presented here is in a simplified format for illustration purposes only.

Manage Teams and Responsibilities (F2412)

In this app, we will define the authorised users to approve the credit limit requests. Go to Manage Teams and Responsibilities Fiori apps and choose Create. Enter the required general information and ensure that you have selected the Type Credit Limit Request (UKM_CLR). Maintain the credit segment, team owners, and team members. Save and make sure that you have enabled it.

Maintain the approvers

Manage Credit Management Rules (UKM_BRF_CONFIG)

This app is used to define hierarchies for the approval process in credit management, and to define settings that are applied for your formulas for credit limit calculation and for the calculation of the score. We will only cover the approval process for credit limit requests in this blog.

The approval hierarchy that you define allows you to ensure that only authorized persons can approve a credit limit request. Choose the rule for Credit Limit Request: Approval Hierarchy and maintain your approval steps in the table contents.

Define your approval steps

Hot Tip: Use the simulation function (Start Simulation) in this app to test your approval steps.

Enter your simulation data

Validate the result according to your defined approval steps.

Result

You can also choose to Execute and Display Processing Steps to evaluate how the result was determined.

Processing Steps based on simulation

Manage Situation Types (F2947)

Copy the Situation Template FIN_CLR_APPROVAL to create your own Approve Credit Limit Requests situation type. I have enabled Monitor Instances to view and edit the list of the active situation instances for the enabled situation type.

Conditions play an important role

Manage Credit Limit Requests (F5602)

In this app, create a credit limit request, edit, and save it.

Create credit limit request

Update the credit limit by changing the status to In Approval and save it.

Update credit limit request status

It will then trigger the determination of applicable approval hierarchy.

Approval steps determined

Approve Credit Limit Requests

A notification will be triggered to the recipients about the credit limit request pending their approval. Clicking on the notification will direct the approver to the credit limit request where it can be approved or rejected. When approving the credit limit, the approver can reduce or increase the requested credit limit.

Notification sent to approver

Clicking on the notification directs the approver to the credit limit request. The approver can enter the notes, limit approved, and limit validity date.

Approval

Manage Credit Accounts (F4596)

Open the Manage Credit Accounts Fiori app to verify that the credit limit is updated in the business partner.

Credit limit is maintained based on the approved amount

Monitor Situations (F3264)

Since we enabled the monitor instance in the step above, we can capture and monitor data for the situation type in this Fiori app.

Instances created

I hope the above steps give you an idea on how to use the Manage Credit Management Rules in conjunction with Situation Handling.