Which aspect is a key component of credit management in SAP FI?

Setting and monitoring customer credit limits is a fundamental aspect of credit management in SAP Financial Accounting. This process involves determining the maximum amount of credit that can be extended to a customer based on various factors such as their creditworthiness, payment history, and overall financial stability. By establishing these limits, companies can effectively manage their credit risk and reduce the likelihood of financial losses due to customer defaults.

In addition to setting limits, monitoring these credit thresholds is crucial. Regular assessments help ensure that customers continue to meet their credit criteria, allowing businesses to make informed decisions when extending credit. This proactive approach helps in maintaining healthy cash flow and minimizes the risk associated with extending credit to customers who may be unable to fulfill their obligations. Overall, this component is integral to the risk management strategy within the financial operations of any organization.