In the LSP business process, a customer submits a transportation requirement to the Logistics Service Provider. The LSP analyzes the origin, destination, shipment weight, volume, and mode of transport (sea, air, or road). Based on this analysis, the LSP provides a quotation, which the customer then approves. The customer approves the service level and rate card upon receiving the quotation. Once the quotation is approved, the customer creates a shipment request. The LSP receives the request and based on this request, places a Forwarding Order in SAP Transportation Management.
One of the important features of the Forwarding Order is that the LSP can check the credit limit while placing an order, and the order has the facility to release the credit block manually.
In this blog, I will explain the Credit Management functionality in the Forwarding Order and the configuration needed.
The credit limit is checked based on the amount calculated through the charge calculation. It is always checked against the party mentioned under the partner function “Payer” (partner function PY).
When the charges are calculated, the system automatically checks the credit limit amount, and the credit check occurs automatically in the background.
In this case, the credit limit has been exceeded. The credit limit is 21,000 USD, but the current credit exposure is 25,485 USD.
The system proposes three options: you can either release the order manually, reject the order, or leave it blocked and close.
If you choose “Leave Blocked and Close”, the Freight Unit will remain in blocked status and no Freight Order can be created.
To release the order manually, click on “Check Credit Limit”, enter the Release Reason, and save. The Freight Unit will then be available for execution and planning.
Note: The manual release of a credit-blocked document is always a deliberate process requiring user interaction. Automatic release of credit-blocked documents in the background — without user interaction — is not available as standard SAP functionality. The purpose of the credit block release process is for a credit representative or credit analyst to review the blocked documents and take the necessary action.
If you choose “Reject Order”, the entire Forwarding Order will be rejected and the associated Freight Unit will be cancelled accordingly.
Note: It is important to be aware that the cancellation of a Forwarding Order cannot be undone. Additionally, a Forwarding Order cannot be cancelled if it has already been assigned a freight document.
Configuration
- Create a Sales Organization in transaction PPOME and maintain the BSG (Business System Group) organizational unit.
2. Define the default Distribution Channel and Division in the configuration: SPRO → Transportation Management → Basic Functions → General Settings → Define General Settings for TM
3. Activate the Credit Limit Check and define the action to be taken if the credit check fails, under the Forwarding Order type configuration: SPRO → Transportation Management → Forwarding Order Management → Forwarding Order → Define Forwarding Order Types
Additional configuration is required specifically for Credit Management. These configurations are applicable for activating credit management for both Sales Orders and Forwarding Orders. These configurations will be covered in the next blog.
Transaction
Transaction: BP
Select Role: UKM000 (SAP Credit Management)
Under the Credit Segment Data tab, you can define the Credit Limit for the business partner.
Note: Transaction UKM_BP can also be used as an alternative to transaction BP, as it is preselected for the UKM000 role and provides direct access to the Credit Profile and Credit Segment Data tabs where the Credit Limit, Check Rule, and Risk Class are maintained.
Thanks,
Ranadeep Basak
