What is weighting factor in SAP FS-BA-PM-CR - Credit Risk?

SAP Term: weighting factor

• Component: FS-BA-PM-CR

• Component Name: Credit Risk

• Description: A weighting between 0 and 1 that indicates the counterparty's dependency on the i-nth sector according to the weighting type. &EXAMPLE& A German company is assigned 100% to the country sector "Germany".

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• Key Concepts: 
  Weighting factor is a numerical value used in the Credit Risk Management component of SAP FS-BA-PM-CR. It is used to assign a risk score to a customer based on their creditworthiness. The weighting factor is determined by the user and can be adjusted to reflect the user's risk appetite. 
  
  How to use it: 
  The weighting factor is used to calculate the risk score of a customer. The user can assign different weighting factors to different criteria, such as credit history, payment history, and financial stability. The higher the weighting factor, the more important that criteria is in determining the risk score. 
  
  Tips & Tricks: 
  When assigning weighting factors, it is important to consider the customer's overall creditworthiness and not just one or two criteria. This will ensure that the risk score accurately reflects the customer's creditworthiness. Additionally, it is important to regularly review and adjust the weighting factors as needed to ensure that they are up-to-date and reflect the user's risk appetite. 
  
  Related Information: 
  For more information on how to use weighting factors in SAP FS-BA-PM-CR Credit Risk Management, please refer to the official SAP documentation. Additionally, there are many online resources available that provide tips and tricks for using weighting factors in SAP FS-BA-PM-CR Credit Risk Management.