What is net position in SAP FS-BA-PM-CR - Credit Risk?

SAP Term: net position

• Component: FS-BA-PM-CR

• Component Name: Credit Risk

• Description: Grouping of multiple positions. The net position is to be calculated for special and general market risks. For special market risk, the net position is calculated from the difference between the long position and the short of the same securities; in other words, from the positions and payment claims and obligations of spot, forward, and option transactions. When the net position is calculated, any purchase obligations org repo-style transactions must also be taken into account.

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• Key Concepts: 
  Net position is a term used in the SAP Credit Risk Management (FS-BA-PM-CR) component to refer to the total amount of credit exposure a customer has with a company. It is calculated by subtracting the total amount of payments made by the customer from the total amount of invoices issued to them. 
  
  How to use it: 
  Net position can be used to assess a customer’s creditworthiness and determine whether they are able to pay their invoices on time. It can also be used to set credit limits for customers and monitor their credit exposure over time. 
  
  Tips & Tricks: 
  It is important to regularly review net position data in order to ensure that customers are not taking on too much credit risk. Additionally, it is important to keep track of any changes in net position over time in order to identify any potential issues or risks. 
  
  Related Information: 
  Net position is closely related to other terms such as credit limit, payment terms, and payment history. It is also important to consider other factors such as customer behavior and financial stability when assessing a customer’s creditworthiness.