What is liquidity limit in SAP FS-LRM - Liquidity and Risk Management?

SAP Term: liquidity limit

• Component: FS-LRM

• Component Name: Liquidity and Risk Management

• Description: Threshold used to check whether key figures remain within a predefined tolerance level.

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• Key Concepts: 
  Liquidity limit is a feature of the SAP FS-LRM Liquidity and Risk Management component. It is used to define the maximum amount of liquidity that can be used for a particular transaction. This helps to ensure that the company does not exceed its available liquidity and risk exposure. 
  
  How to use it: 
  The liquidity limit can be set up in the SAP system by defining the maximum amount of liquidity that can be used for a particular transaction. This can be done by setting up a liquidity limit in the system and then assigning it to the relevant transaction. The system will then automatically check the available liquidity before allowing the transaction to go through. 
  
  Tips & Tricks: 
  It is important to ensure that the liquidity limit is set up correctly in order to avoid any potential risks. It is also important to regularly review and update the liquidity limit as needed, as market conditions can change over time. 
  
  Related Information: 
  The SAP FS-LRM Liquidity and Risk Management component also includes features such as cash flow forecasting, risk management, and liquidity planning. These features can help companies better manage their liquidity and risk exposure.