What is internal rating procedure in SAP FS-BP - Business Partner?

SAP Term: internal rating procedure

• Component: FS-BP

• Component Name: Business Partner

• Description: An internal procedure that is used to assess business partners in terms of their payment history, credit standing, and other criteria, for various business processes. The result of the business partner assessment is a rating that is valid for a fixed time period. &EXAMPLE& To assess your portfolio "Company" for calculating the capital requirement in accordance with the foundation IRB approach, your bank has developed and approved an internal rating procedure.

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• Key Concepts: 
  Internal rating procedure is a feature of the FS-BP Business Partner component of SAP. It allows users to assign a credit rating to a customer based on their financial information. This rating can then be used to determine the customer's creditworthiness and the terms of any credit agreement. 
  
  How to use it: 
  To use the internal rating procedure, users must first enter the customer's financial information into the system. This includes their income, assets, liabilities, and other financial data. Once this information is entered, the system will generate a credit rating for the customer. This rating can then be used to determine the terms of any credit agreement with the customer. 
  
  Tips & Tricks: 
  When using the internal rating procedure, it is important to ensure that all of the customer's financial information is accurate and up-to-date. This will ensure that the credit rating generated by the system is accurate and reliable. Additionally, it is important to review any credit agreements with customers before they are finalized to ensure that they are fair and reasonable for both parties. 
  
  Related Information: 
  The internal rating procedure is just one of many features available in the FS-BP Business Partner component of SAP. Other features include customer segmentation, risk management, and analytics tools. Additionally, SAP offers a range of other software solutions that can be used in conjunction with FS-BP Business Partner to further enhance its capabilities.