Dealer Retention Processing
Purpose
Vault
provides the ability to automatically retain nominated percentages of Fixed
Loan components so these may be dealt with at a later date. Retentions may be held to be paid out at the
end of a loan or applied to a loan if it has to be written off. The Dealer then takes some responsibility for
the under recovery of a loan.
Timing
Dealer
retention processes takes place prior
to the running of month end processes for the Fixed Loan and Dealer modules.
Process
Transaction
types will have already been setup to allow the processing of retention transactions.
Common
processes are:
- Processing of monthly retention amounts from
Dealer Accounts to appropriate GL Codes for new loans
- Processing of monthly retention payouts from GL
Codes to appropriate Dealer Accounts
- Retention amount is to be transferred to the Fixed
Loan account to assist with the recovery of the loan arrears (loan is to
be written off)
- Retention amount is to be taken to income
- To
identify Retention balances to be transferred the Fixed Loan
Dealer Retention Report should be printed prior to running the Dealer or
Fixed Loan module month end processes.
This
report can be found at:
- Fixed
Loan | Print Dealer Retention Report
It
is recommended this be printed in Report Order First Analysis Code and Include
Closed Accounts.
New Accounts
Once
the report has been printed add the values of the balance of the Contract
Retention column for the AKFA- A and AKFB- B loans. There will be a single total for the AKFP –
Prime loans.
- Dealer
| Access Dealer Accounts
(This
is the Dealer specified on all new contracts, so this is where the retention
amounts are posted too).
the following two transactions to the Dealer
Account value dated the month end date:
The
amount entered will be the total of the AKFA and AKFB contract retention
amounts. This will clear the future
ledger balance back to zero and post the amount to GL Code 874.
Note:
the amount must be a positive
The
amount entered will be the AKFP contract retention amount. This will reduce the dealer current ledger
balance by this amount and post the same amount to GL Code 873.
Note:
the amount must be a positive
Closed Accounts: Prime Loans – Transfer to Dealer
This
amount can be identified under the ‘Closed Accounts’ section of the Dealer
Retention Report. The amount to be dealt
with will be the balance of the Contract
Retention column for any AKFP – Prime loans.
Note:
The IRR Clawback is dealt with automatically and should not be transferred.
Note:
the amount must be a negative
This
will increase the dealer current ledger balance by this amount and post a debit
amount to GL Code 873.
Existing
processes should be continued with to deal with all closed loans written
between 1/4/14 and 31/1/15.
Closed Accounts: A & B Loans - Transfer to Income
This
process will be undertaken for all accounts that have a First Analysis Code of
AKFA or AKFB that have closed during the current month.
The
amount can be identified at the second section of the Dealer Retention
Report. The amount to be dealt with will
be the balance of the Contract Retention column for any AKFA or AKFB loans.
A
General Ledger Journal will be added dated the month end date which will:
- Debit
GL Code 874 with the amount ascertained above
- Credit
GL 92.00 with the same amount
Write Off Recovery
This
will happen when an A or B loan is written off.
An amount will be transferred from the profit reserve to offset some of
the loss on this account.
A Cashbook
Journal will be required to undertake this process. This will be created during the month at the
time the loan is being written off and should be dated the loan write off date. Both transactions should be entered as
Withdrawals.
The
first transaction raised will use the GL module transaction type (CBGLXFER) coded
to GL Code 873. The amount entered will
be a positive value.
The
second transaction will use transaction type WOX coded to the Fixed Loan
account being written off. The amount
entered will be a negative value.
Once
posted, the balance of GL Code 873 will decrease by this amount and the Fixed
Loan account current ledger balance will also decrease by this amount.
Processing
Notes
The
first three processes must be undertaken prior to the month end being run for
Fixed Loans and Dealers.
Once
these processes have been completed the Fixed Loan Dealer Retention Report
should be reprinted ensuring the Write Off transaction type WOX has been
specified. This will provide proof of
the amounts used in those processes.
Transfer
of Income can be undertaken either before or after the GL month end. The journal must be dated with the correct
month end date.
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