Explain credit management.
Credit management is to manage the credit limit of the customers which takes place in the credit control area. Credit Management can be implemented either centralised or decentralised or somewhere in between according to the corporate requirements.
Credit limits and credit exposure are managed at both credit control area and customer level. We can assign customer specific credit control areas and specify the appropriate credit limits in the customer master data record.
Example: - If it is centralised, then you can define one credit control area for all of your company codes.
-If it is decentralised, then you have to define credit control area for each company code or each group of company codes.