Lease Asset Maturities

Lease Asset Maturities

Purpose

Describes process available when a Lease matures naturally or early.

Also describes automated transaction processing if a loan naturally matures.

Natural Maturity Process

Advising of maturing leases is a business process that should be performed on a regular basis.  There is a series of steps that will always be followed.  These are described below.
  1. Print the Lease Maturity Report for a future date range.  This is normally done between 1 and 3 months prior to maturity.  The report can be printed for either leases maturing between a date range, or lease with X number of instalments still to post.  This report is normally given to the sales team for the follow up of maturing leases.
  2. Create Lease Asset Maturity Communications.  This process will activate the initial contact with a client advising of the immanent lease maturity, detailing new lease options or extended rental options.
  3. After the above two processes have been undertaken, it is normally the responsibility of the sales team or Dealership to follow up on the lease so a new lease can be secured.  Both the above report and communication can be printed by dealership.  If the First or Second Analysis code has been used to identify the internal sales person responsible for the lease account, then they can be printed for each sales person.
  4. To assist the sales person/dealer to secure a new lease, the Disclosure Report can be printed to assist with this follow up.  This report will show important information regarding the lease account and asset.  
At the end of the Natural Maturity process a number of scenarios may arise

These are detailed below:

Extended (Inertia) Rentals

The client may not have made up their mind regarding the lease.

Account Type Setup for Lease Extended Rentals


Field
Explanation
Extended Rental
A Transaction Type must be set up as follows for extended rentals to be processed



The extended rental Transaction Type must be set up as Control Posting only and have the Extended Rental Invoice communication attached to it
Ext Rental Reversal
A Transaction Type must be set up as follows for rental reversal to be processed


Automated Extended Rental Processing

For automated extended rental posting to happen the following must be setup:
  1. The Extend Rental Transaction Type must be set up on the Lease Account Type dialog
  2. All regular instalments have been posted
  3. The Asset Status remains as  
If the above is set up the extended rental will be posted when the Lease instalments are posted
A separate count is kept by the system of the number of extended rental transactions posted
The standard instalment amount will be posted as an extended rental unless a specified extended rental amount has been entered on the  dialog

Extended Rental Reversal

This process reverses each extended rental transaction posted add back the amount of maintenance and depreciation incorrectly charged.
Before any extended rentals can be reversed the following must be set up:
  1. The Extend Rental Reversal Transaction Type must be set up on the Lease Account Type dialog
  2. Extended Rentals must have been posted.  The number posted is displayed on the Asset details dialog.

  3. The Asset must be ‘Returned to Client’  
Extended Rentals can be reversed from the  dialog via the  button
 
 



 
Enter the number of extended rentals to reverse. This cannot be more than the number of extended rentals posted.

  to create the extended rental reversing transactions using the Transaction Type specified on the account type.

As there is no linkage between asset and account transactions the reversal make the following assumptions:
  1. The frequency of the account has not changed – The date of the reversal transaction will be calculated using the asset start date and the number of instalments that have posted. It is possible this may not match the actual instalment date if the asset start date or the instalment frequency has been changed.
  2. The extended rental amount has not been changed on the  screen. If it has then the user will need to reverse only the transaction as the current amount, then change the value and reverse those at the new amount.

Closure of the account

The asset may be returned to the leasing company

In this case the Asset Stated will be changed to Returned to Stock  

As long as both the current and future balance are 0.00, the account can be closed

This can be achieved either manually or automatically

Manual Closure

This entails making the account inactive and entering a close date into the Close Date field on the lease account

This is the recommended action if the system has been set up to automatically post extended rentals

Automatic Closure

  1. Account | Auto Close Accounts
The following dialog will display:
 


The Termination Reason will be allocated to the account and can be reported on through the Accounts | Print Termination Summary Report

Note: This process is NOT recommended if you have automated extended rental processing set up. It will close any accounts with a 0.00 balance in the Current and Future Ledgers. However, this can be a valid status for an account that is fully paid out, but subject to extended rental.

Early Termination Process

Refer to the Lease Early Termination Instructions
  1. Rental NPV Early Termination
  2. Rental Standard Early Termination
  3. P&I Standard Early Termination 
  4. P&I Early Termination
  5. P&I NPV (FI) Early Termination



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