What is credit limit in SAP FI-AR - Accounts Receivable?

SAP Term: credit limit

• Component: FI-AR

• Component Name: Accounts Receivable

• Description: The maximum amount granted to a customer as credit.

Smart SAP Assistant

• Key Concepts: 
  Credit limit is a feature of the FI-AR Accounts Receivable component in SAP. It is a limit set by a company on the amount of credit that can be extended to a customer. This limit is used to control the amount of credit that can be extended to customers and to ensure that customers do not exceed their credit limit. 
  
  How to use it: 
  In SAP, credit limits are set up in the FI-AR Accounts Receivable component. The credit limit can be set up for each customer and can be adjusted as needed. The credit limit can also be set up for groups of customers, such as all customers in a certain region or all customers with a certain credit rating. 
  
  Tips & Tricks: 
  It is important to monitor customer credit limits regularly to ensure that customers do not exceed their limits. It is also important to review customer credit limits periodically to ensure that they are still appropriate for the customer's current financial situation. 
  
  Related Information: 
  The FI-AR Accounts Receivable component also includes features such as payment terms, dunning procedures, and interest calculation. These features can be used in conjunction with the credit limit feature to ensure that customers are paying their bills on time and that they are not exceeding their credit limits.