What is loss allowance in SAP FIN-FSCM-TRM-TM - Transaction Manager?

SAP Term: loss allowance

• Component: FIN-FSCM-TRM-TM

• Component Name: Transaction Manager

• Description: A monetary reserve used to protect a financial asset against different risks. This reserve consists of impairments and provisions that can be reversed, if the potential loss really occurs.

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• Key Concepts: 
  Loss allowance is a feature of SAP Transaction Manager (TM) that allows companies to set up a reserve for potential losses due to bad debt or other financial risks. This reserve is used to offset any losses that may occur, and can be adjusted as needed. The loss allowance is calculated based on the company's risk profile and can be adjusted to reflect changes in the company's risk profile. 
  
  How to use it: 
  In SAP TM, the loss allowance is set up in the Risk Management module. The user can define the parameters for the loss allowance, such as the amount of the reserve, the type of risk being covered, and any other relevant information. Once these parameters are set, the system will automatically calculate the loss allowance based on the company's risk profile. 
  
  Tips & Tricks: 
  It is important to regularly review and adjust the loss allowance as needed. This will ensure that the reserve is adequate to cover any potential losses due to bad debt or other financial risks. Additionally, it is important to keep track of any changes in the company's risk profile so that the loss allowance can be adjusted accordingly. 
  
  Related Information: 
  For more information on setting up and managing a loss allowance in SAP TM, please refer to SAP Help documentation or contact your local SAP support team.