What is 'risk category' in SAP SD - Sales and Distribution?

risk category - Overview

• Component: SD

• Component Name: Sales and Distribution

• Description: Classifying attribute for customers from the point of view of credit risk.

risk category - Details

• 
  Key Concepts: 
  Risk category is a feature in SAP Sales and Distribution (SD) that allows users to classify customers according to their risk level. This classification is based on the customer’s creditworthiness, payment history, and other factors. Risk categories are used to determine the credit limit for each customer and to decide whether or not to accept orders from them.
  
  How to use it: 
  In SAP SD, risk categories are assigned to customers in the customer master record. The risk category is used to determine the credit limit for each customer and to decide whether or not to accept orders from them. The risk category can also be used to set up different payment terms for different customers.
  
  Tips & Tricks: 
  It is important to regularly review and update the risk categories assigned to customers in order to ensure that they are accurate and up-to-date. This will help ensure that customers are not given too much or too little credit, and that orders are accepted from customers who can be trusted to pay on time.
  
  Related Information: 
  For more information about risk categories in SAP SD, please refer to the official SAP documentation at https://help.sap.com/viewer/product/SAP_ERP_SD/6.0/en-US.