This document provides an overview of the SAP Credit Management (FSCM) system used by ALU. It describes how business partners are set up and organized in a credit hierarchy with credit profile and segment data. It also explains how credit exposure is calculated and displayed based on sales and billing documents. The system is implemented in the Blue Planet system and integrated with the QTC collection system.

1. FSCM Overview

2. Overview
• SAP Credit Management holds information about ALU business
partners in a separate set of Master Data called „Business
Partners‟. They correspond to „Customers‟ in Accounts
Receivable and Sales and Distribution. In terms of „Partner
Function‟, this is only the „Payer‟ that is relevant to SAP Credit
Management.
• The creditworthiness data of each Business Partner is grouped
under Credit Profile Data and Credit Segment Data
• Business Partners are organized through a Hierarchy that
respects the Credit Hierarchy today in place in Blue Planet.
• The transaction to view/maintain the Business Partner Master
Data is UKM_BP.

3. Benefits
• The creditworthiness and payment behavior of the business
partners have an immediate effect on the business results.
• Efficient receivables and credit management reduces the risk of
financial losses and helps you to optimize business relationships
with the business partners.
• SAP Credit Management replaces the existing Credit
Management which is a purely internal FI credit management
application, whereas SAP Credit Management provides you with
a comprehensive, integrated, and cross-system application.

4. FSCM – System architecture (Blue
Planet / QTC)
• FSCM component is implemented in Blue Planet
• QTC system is connected to FSCM component in Blue
Planet

5. FSCM – Business Partner Master
data - Overview
• SAP Credit Management holds information about ALU business
partners in a separate set of Master Data called „Business
Partners‟. They correspond to „Customers‟ in Accounts
Receivable and Sales and Distribution. In terms of „Partner
Function‟, this is only the „Payer‟ that is relevant to SAP Credit
Management.
• The creditworthiness data of each Business Partner is grouped
under Credit Profile Data and Credit Segment Data
Business Partners are organized through a Hierarchy that
respects the Credit Hierarchy today in place in Blue Planet.
The transaction to view/maintain the Business Partner Master
Data is UKM_BP.

6. FSCM – BP Master data – Credit
Profile Data
• The Credit Profile Data includes the Risk Class (AQR), the
Check rules and externally determined rating values (such as the
score).
• Whereas classic Credit Management works with Credit Control
Areas, SAP Credit Management uses Credit Segments to which
Credit Control Areas are assigned.
• A common credit segment has been created in FSCM: Z_ECA
“ALU Global Credit Segment”, which has the currency EUR
and Exchange Rate Type M.

7. FSCM – BP Master data – Credit
Profile Data
• Credit Control areas ECA & US1 are assigned to this one Credit
Segment Z_ECA. Thus all the Company Codes already defined
today in Blue Planet will be assigned to this one Credit Segment
Z_ECA and the currency of the credit limit will be the same as
the one used in the Credit segment (thus the credit limits of all
the customers will be in EUR).
• The Credit segment Data includes the current Trade Credit
Limit, the Credit Exposure, the Credit Exposure Utilization and
Payment Behavior Key Figures.

8. FSCM – BP Master data – Credit
Hierarchy
• In FSCM ALU Business Partners are structured under a
Customer Hierarchy composed of three levels:
• Level 1 – Customer Group
• Level 2 – Customer Sub-Group
• Level 3 – Customer
• Customer Groups and Sub-groups aggregate ALU business
partners legal entities belonging to the same unique holding
structure, where the Customer Group represent the ultimate
consolidated entity and Customer Sub-groups represent the
subsidiaries sharing the same Asset Quality Rating (AQR) and
Region.
• The Customer Hierarchy will be used to aggregate the Credit
Exposure of all „Business Partners‟ belonging to a Sub-Group
and of all the Sub-Groups belonging to one Group.

9. FSCM – BP Master data – Credit
Hierarchy
• AQRs are set at Sub-group and Customer Level of the
Customer Hierarchy, while TCLs are set at Subgroup
Level.
• However, it is possible that „Sold-to party Customers‟
belong to a flat hierarchy meaning that in this case there
is no Sub-group and AQRs and TCLs are then set at
Customer Level.
• The Credit Hierarchy can be displayed through
transaction UKM_BP under section « Relationships »

10. FSCM – Credit exposure
• When you post documents from sales, shipping, and billing,
changes to the commitment are transmitted to FSCM - Credit
Management. In SAP Credit Management, the commitments
contribute to the credit exposure of a business partner.
• The Credit Exposure can be displayed at Customer, Sub-group
or Group level.
• The Credit Exposure is reported in EUR and Transaction
currency. If the Transaction currency is not EUR, it is
automatically converted at the latest valid Exchange rate.

11. FSCM – Credit exposure
• The Credit Exposure is updated in real-time.
• Secured Exposure are reported under the « Hedged Credit
Exposure »
• It is possible to drill-down to a line item by double-clicking on a
Commitment line.
• The Credit Exposure can be displayed through transaction
UKM_BP or UKM_COMMITMENTS.