Credit Management :
Credit Management is important part in any business. To minimize the credit risk , every company has certain customer category and based on that the credit limit  and the risk associate with that can be fixed.
The Credit Management is based on a Credit Control Area , customer risk category and the document type.
The Credit Management basically controls the credit limit to the customer and the dynamic update with approval.
Credit Control Area is a organization unit. The credit Control Area can be Centralized or Di centralized.

    Centralized :  Centralized Credit Control Area is One Credit Control Area which is assigned with multiple company code.

 Di centralized : The  Di centralized Credit Control Area is one Credit Control area is assigned to one company code.

CREDIT MANAGEMENT
A credit limit may be a customer's credit limit, which is the permitted limit of value of open items, such as invoices not yet paid, plus the value of open sales orders.
-          The credit limit is the total combined value of the following documents:
-          Net value of sales order
-          Open Sales order: order created, but not delivered
-          Open deliveries: delivered, but not invoiced
-          Open billing doc: value of billing doc, which has not yet been forwarded to accounting
-          Open items: forwarded to accounting, but not settled.
Types of Credit Check
-          Simple Credit Check
-          Automatic Credit Check
o        Static
o        Dynamic
Simple Credit Check:
SPRO- IMG- SD- Basic Functions- Credit Mgmt/ Risk Mgmt- Simple Credit Check- Assign Credit Check to Doc Types.
-          Based on sales doc types
-          It will check all the above-mentioned docs & if the credit limit exceeds, the system responds in the way defined by you in the configuration menu.
-          Cannot differentiate according to customer
3 ways to Control the Simple Credit Check:
-          A: warning
-          B: error message: the doc cannot be saved
-          C: warning message with delivery block: the doc can be saved but is automatically blocked for delivery.
Automatic Credit Check:
This credit mgmt control is maintained by using the automatic credit control functionality. The automatic credit control divides the sales doc types, the delivery doc types, & goods issue into specific credit groups. It also uses the customer's risk category as assigned to the CMD of the payer & assigns an outcome proc to the combination of the above 2 objects, i.e. the credit group & customer risk category along with the credit control area. The definition of customer's risk category is carried out in the fin accounting module.
A customer's risk category is a grouping category that controls the credit check when automatic credit control takes place. Thus one can assign high-risk customers to risk category for e.g. A01, medium risk to B01 and low risk to C01.
Automatic credit check divides customers in to 3 categories:
-          High-risk customers,
-          Low risk customers &
-          Medium risk customers.
A credit check can only occur at 3 places: Credit Group
-          Sales order: for high risk customers
-          Delivery: for medium risk customers
-          Goods Issue: for low risk customers.