How To Fix FVD_LOCAC065 - Credit limit is smaller than outstanding balance

SAP Error Message - Details

• Message type: E = Error

• Message class: FVD_LOCAC - Messages for Loan Core Account

• Message number: 065

• Message text: Credit limit is smaller than outstanding balance

Self-Explanatory Message

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Smart SAP Assistant

• What is the cause and solution for SAP error message FVD_LOCAC065 - Credit limit is smaller than outstanding balance ?

  The SAP error message FVD_LOCAC065 indicates that the credit limit set for a customer is smaller than their outstanding balance. This typically occurs in the context of financial transactions, particularly in accounts receivable or credit management modules. Here’s a breakdown of the cause, potential solutions, and related information:
  Cause:
  
  Outstanding Balance Exceeds Credit Limit: The customer's current outstanding balance (including open invoices, credit memos, etc.) has surpassed the credit limit that has been set in the system.
  Credit Limit Configuration: The credit limit may not have been updated to reflect recent changes in the customer's financial situation or payment history.
  Data Entry Errors: There may be errors in the data entry of invoices or payments that have led to an inflated outstanding balance.
  Credit Management Settings: The credit management settings in SAP may not be configured correctly, leading to discrepancies in credit limit assessments.
  
  Solutions:
  
  
  Review Customer Credit Limit:
  
  Navigate to the customer master data and check the credit limit assigned to the customer.
  If necessary, increase the credit limit to accommodate the outstanding balance.
  
  
  
  Check Outstanding Balance:
  
  Review the customer’s outstanding invoices and payments to ensure that the balance is accurate.
  Investigate any discrepancies or errors in the invoicing process.
  
  
  
  Adjust Credit Management Settings:
  
  If applicable, review the credit management settings in SAP to ensure they align with your organization's policies.
  Consider implementing a more dynamic credit limit assessment based on the customer’s payment history and financial health.
  
  
  
  Communicate with the Customer:
  
  If the credit limit cannot be increased, communicate with the customer regarding their outstanding balance and discuss payment options.
  
  
  
  Payment Processing:
  
  Encourage the customer to make payments on their outstanding balance to bring it within the credit limit.
  
  
  
  Consult with Finance Team:
  
  Work with your finance or credit management team to assess the situation and determine the best course of action.
  
  
  
  Related Information:
  
  Transaction Codes: You may use transaction codes like FD32 (Change Customer Credit Management) to adjust credit limits or FBL5N (Customer Line Item Display) to review outstanding balances.
  Credit Management Configuration: Familiarize yourself with the configuration settings in SAP related to credit management, which can be found in the SPRO (SAP Project Reference Object) under Financial Accounting.
  Documentation: Refer to SAP documentation or help files for detailed instructions on managing credit limits and outstanding balances.
  
  By addressing the underlying issues causing the error, you can resolve the FVD_LOCAC065 message and ensure smoother financial transactions with your customers.