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

SAP Term: net exposure

• Component: IS-B-RA-CL

• Component Name: Default Risk and Limit System

• Description: Volume-oriented attributable amount for primary business partners and guarantors that takes into account the risk-reducing and risk-transferring effect of collateral. Compare with the gross exposure.

Smart SAP Assistant

• Key Concepts: 
  Net exposure is a term used in the IS-B-RA-CL Default Risk and Limit System of SAP. It is the difference between the total credit exposure of a customer and the total collateral held against that customer. It is calculated by subtracting the total collateral from the total credit exposure. 
  
  How to use it: 
  Net exposure is used to measure the risk associated with a customer’s credit. It is important to monitor net exposure as it can indicate whether a customer is at risk of defaulting on their payments. The net exposure should be monitored regularly to ensure that customers are not taking on too much risk. 
  
  Tips & Tricks: 
  It is important to ensure that net exposure is kept at an acceptable level. This can be done by monitoring the customer’s credit and collateral regularly and adjusting the amount of credit or collateral as needed. Additionally, it is important to ensure that customers are aware of their net exposure so that they can make informed decisions about their credit. 
  
  Related Information: 
  Net exposure is related to other terms such as credit exposure, collateral, and default risk. Credit exposure refers to the amount of money a customer owes, while collateral refers to any assets held by a customer as security for a loan or other debt. Default risk refers to the risk that a customer will not be able to repay their debt.