The application provides a limit control system which allows limits to be defined and maintained for specific parties. The Liability Concept basically defines whether a business sector is linked to the limit system or not. The limit system defines limits and indicates how limit requests are to be handled.

It is possible to define the following types of limit:

• Overall
• Group
• Product
• Purpose

The overall limit can be used for all addresses associated with the party, for all products and for all purposes in all currencies.

The group limit can be used for a specific group of products in all currencies. This can be a sub-limit of an overall limit, but it must not exceed the overall limit either by itself or in combination with any other limit (product and/or purpose).

The product limit can be used for a specific product in all currencies. This, again, can be a sub-limit of an overall limit, but must not exceed the overall limit either by itself or in combination with any other limit (group and/or purpose).

The purpose limit can be used for specific purpose in all currencies. The purpose has to be defined via a codetable. The limit can be a sub-limit of an overall limit, but it must not exceed the overall limit, either by itself or in combination with any other limit (group and/or product).

Limits can be:

• Blocked (no new business transaction can be carried out; existing limit is blocked)
• No limit (no business transaction involving a liability can be carried out; a warning message will appear during processing)
• Normal (a new limit can be entered, subject to the type of limit)
• Unlimited (all amounts are possible)

The status of a limit can be combined with limit types; for example, 'Overall limit - unlimited' and 'Group limit - normal with specific amount'.

In addition, the following information is displayed:

• Limit utilized (completely released items)
• Earmarked (items pending and waiting for release)
• Open (free amount of a 'Normal' limit)

The deletion of limits has a direct influence on the processing of business transactions defined as being subject to limit control for the respective party. In some transactions, further processing may not be possible. Accordingly, the deletion of limits should be handled very carefully and should be restricted to cases where the party is deleted at the same time. For all other cases, a change of status (Blocked, or No Limit) would be sufficient.

In the standard application, limits are implemented as overall limits for parties, for their head office and for countries. In cases where no parties other than the head office (group) has been entered for a party, a limit record for the head office with no party number is used for booking purposes A limit request is then always booked in in 3 different limit types in parallel. This allows the total amounts to be compared per limit type.

If an insufficient limit is available, the application blocks the respective request out of the transaction. The limit request can then only be handled (accepted or rejected) from within the limit administration. After selecting the appropriate limit and clicking the icon, all pending limit requests are displayed. Selecting a single limit request enables the , and icons. Clicking the relevant icon marks the selected limit request selected accordingly.

Limit requests are created during the processing of business transactions. Such limit requests are stored in a separate database table.

It is possible to add, modify or delete a limit request.