What is target credit in SAP CO - Controlling?

SAP Term: target credit

• Component: CO

• Component Name: Controlling

• Description: The anticipated credit of a cost center, business process, or order. In Overhead Cost -OM, the target credit is calculated by multiplying the actual activity quantity by the planned activity price. In Cost Object -PC-OBJ, the target credit is calculated by multiplying the yield delivered to stock by the standard price.

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• Key Concepts: 
  Target credit is a feature of SAP Controlling (CO) that allows users to set a target credit limit for a cost center or cost object. This limit is used to control the amount of credit that can be used for a particular cost center or cost object. The target credit limit is set by the user and can be adjusted as needed. 
  
  How to use it: 
  To use target credit, the user must first set up a target credit limit for the cost center or cost object. This can be done in the Controlling (CO) module of SAP. Once the limit is set, the user can then monitor the amount of credit used for that cost center or cost object. If the amount of credit exceeds the limit, an alert will be triggered and the user will be notified. 
  
  Tips & Tricks: 
  When setting up a target credit limit, it is important to consider the current and future needs of the cost center or cost object. It is also important to keep in mind that the target credit limit can be adjusted as needed. 
  
  Related Information: 
  Target credit is related to other features of SAP Controlling (CO) such as budgeting and forecasting. It is also related to other financial features such as accounts receivable and accounts payable.