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

SAP Term: limit type

• Component: IS-B-RA-CL

• Component Name: Default Risk and Limit System

• Description: Defines which procedure is used to determine limit utilizations, and how the underlying transactions are to be taken into account. Limit types are specified by limit characteristics, which are used individually or combined. The limits are defined for the characteristics or combination of characteristics.

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• Key Concepts: 
  Limit type is a component of the IS-B-RA-CL Default Risk and Limit System. It is used to define the type of limit that is to be applied to a customer or account. The limit type defines the criteria for the limit, such as the amount, currency, and duration of the limit. 
  
  How to use it: 
  The limit type is used to set up limits for customers or accounts. The limit type defines the criteria for the limit, such as the amount, currency, and duration of the limit. The limit type can be used to set up limits for individual customers or accounts, or for groups of customers or accounts. 
  
  Tips & Tricks: 
  When setting up a limit type, it is important to consider the criteria that will be used to determine when a limit should be applied. For example, if a customer has multiple accounts, it may be necessary to set up different limits for each account. Additionally, it is important to consider how often the limits should be updated in order to ensure that they remain relevant and up-to-date. 
  
  Related Information: 
  The IS-B-RA-CL Default Risk and Limit System also includes other components such as risk classes and risk categories. These components are used in conjunction with the limit type to define the criteria for when a limit should be applied. Additionally, there are other components such as credit ratings and credit scores which can be used in conjunction with the limit type to determine when a limit should be applied.