What is Limit Management in SAP IS-B-RA-CL - Default Risk and Limit System?

SAP Term: Limit Management

• Component: IS-B-RA-CL

• Component Name: Default Risk and Limit System

• Description: An instrument that allows you to set limit amounts for financial transactions on a differentiated basis. When the utilization of limits is determined, it is possible to look at asset and liability transactions separately, as a cumulated amount, or offset against each other.

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• Key Concepts: 
  Limit Management is a component of the IS-B-RA-CL Default Risk and Limit System, which is part of the SAP Business Suite. It is used to manage credit limits and risk exposure for customers and vendors. It helps to ensure that credit limits are not exceeded and that risk exposure is kept within acceptable levels. 
  
  How to use it: 
  Limit Management can be used to set up credit limits for customers and vendors, as well as to monitor their credit usage. It can also be used to set up risk exposure limits for customers and vendors, and to monitor their risk exposure. The system can be configured to send out alerts when credit or risk exposure limits are exceeded. 
  
  Tips & Tricks: 
  When setting up credit limits, it is important to consider the customer’s payment history and financial situation. It is also important to consider the customer’s risk profile when setting up risk exposure limits. 
  
  Related Information: 
  The IS-B-RA-CL Default Risk and Limit System also includes components such as Credit Risk Analysis, Credit Risk Monitoring, and Credit Risk Reporting. These components can be used in conjunction with Limit Management to provide a comprehensive view of a customer’s or vendor’s creditworthiness and risk profile.