What is valuation factor determination in SAP IS-B-RA-CL - Default Risk and Limit System?

SAP Term: valuation factor determination

• Component: IS-B-RA-CL

• Component Name: Default Risk and Limit System

• Description: Specifies which parameters from the Customizing tables are to be used to value a transaction. &EXAMPLE& Two procedures are required for valuing transactions. The external procedure takes into account legal requirements, such as risk sen sitivity, add-on factors, and default probabilities. In the internal procedure, other valuation factors are considered that are based onempirical values.

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• Key Concepts: 
  Valuation factor determination is a component of the IS-B-RA-CL Default Risk and Limit System. It is used to calculate the risk associated with a customer’s credit limit. The system takes into account the customer’s creditworthiness, payment history, and other factors to determine the appropriate risk level. 
  
  How to use it: 
  The valuation factor determination component of the IS-B-RA-CL Default Risk and Limit System is used to calculate the risk associated with a customer’s credit limit. The system takes into account the customer’s creditworthiness, payment history, and other factors to determine the appropriate risk level. The system then assigns a valuation factor to each customer based on their risk level. This valuation factor is then used to calculate the customer’s credit limit. 
  
  Tips & Tricks: 
  When using the valuation factor determination component of the IS-B-RA-CL Default Risk and Limit System, it is important to ensure that all relevant information about the customer is taken into account. This includes their creditworthiness, payment history, and any other factors that may affect their risk level. Additionally, it is important to regularly review and update the system in order to ensure that it is accurately reflecting changes in the customer’s risk level. 
  
  Related Information: 
  The IS-B-RA-CL Default Risk and Limit System is part of SAP’s Business Suite software package. It is designed to help businesses manage their credit risk by providing an automated system for calculating customer credit limits. Additionally, SAP offers a range of other software solutions for managing credit risk, such as Credit Management and Credit Risk Analysis.