Quotes Accounting - Termination
Accounting - Termination
This screen is where termination accouting journals are created and possibly exported to ALMSys Accounting. This is for Lessee Buyouts, Turn-Ins, Wholesale, and 3rd Party Buyout/Insurance Loss tranasctions only. If the lessee is turning in the lease and leasing a different vehicle, you should use the Accounting - Deal screen, instead.
If this journal is being backdated to the prior month, then check the Backdate posting? box.
Choose the type of termination by pressing one of the buttons on the right side of the grid.
Editing Screen Entries
All data on this screen may be edited, added to, and/or deleted.
To edit an entry, double click on it in the grid. You will be taken to the Add/Edit Accounting Entry Details screen.
To add a new entry, click the button at the top of the grid. You will be taken to the Add/Edit Accounting Entry Details screen.
To delete an entry, select it in the grid and click the button at the top of the grid. Use the Delete All button to delete all entries.
3rd Party Buyout or Insurance Loss
Lessee Trades Vehicle in at Other Dealer
This is the main reason for the 3rd Party Buyout type, as it seeks to combine the lease turn in and walk away scenario with the dealer wholesale scenario. After adding the new quote as a "Lease 3rd Party Buyout or Insurance Loss," go to the corresponding vehicle inventory record and enter the amount of the lease payoff into the Actual Cash Value field. Enter the amount that the 3rd party paid for the vehicle into the Desired Sale Price field. Save these changes.
Exit the inventory and go to the scenario. Enter the amount that the 3rd party paid into the Vehicle Cost Base field and recalculate.
The accounting is now ready to be created.
Insurance Loss with Profit and Customer Refund
This scenario is for an insurance loss that results in an equity refund to the customer and profit. After adding the new quote as a "Lease 3rd Party Buyout or Insurance Loss," go to the corresponding vehicle inventory record and enter the amount of the lease payoff into the Actual Cash Value field. Enter the amount that the insurance company paid for the vehicle into the Desired Sale Price field. Click the Costs button and add a line for the refund of equity to the customer. Save these changes.
Exit the inventory and go to the scenario. Enter the amount that the insurance company paid into the Vehicle Cost Base field. Click the Cap. Additions button and enter a negative entry for the amount refunded to the customer, and then enter another negative entry for the amount of the profit you are taking. Calculate. Your net capitalized cost should equal the actual cash value entered on the inventory screen. (The master codes for the two cap. additions: The profit should be a code that is tagged as a "Lender Processing Fee" as the type and "Profit" as the payable type default. The refund should be a code that is tagged as "None" as the type and "Payable to Customer" as the payable type default.)
Go to the Accounts Payable screen. There should be three entries. One for the amount received from the insurance company, one for the profit (which must show as profit), and one for the refund to the customer (which should show as payable to the customer.)
The accounting is now ready to be created.
If you are doing an insurance loss, and you also have a GAP claim as part of this, then the accounting screen has been programmed to help you with the entries. Consider this example:
Vehicle has a payoff of $16,000.00, but insurance only covers $14,000.00. You file a GAP claim for the remaining $2,000.00.
1. Start by adding a new quote as a "Lease 3rd Party Buyout or Insurance Loss," selecting the correct deal from ALMSys when prompted.
2. Go to the vehicle inventory record. Mark the Actual Cash Value as $14,000.00, enter a Costs of $2,000.00 as a GAP Claim, and the Desired Sales Price as $14,000.00. Change the "Acquired From" name and address to the lienholder (probably you). In the "Disposition of Vehicle" box, set the name and address to that of the insurance company who paid the claim. (This is NOT the GAP company.) Then, fill in $14,000.00 into the Amount Received or Net Cap. Cost field. Save your changes and exit.
3. On the Scenario, set the Vehicle Cost Base to $14,000.00. You need to add TWO Cap. Additions for the GAP amount: one for the GAP Claim and one for the GAP Payable. The Charges Master Code for the "GAP CLAIM" needs to be set up with a Default Ledger Account that is to be a debit, marked as "Insurance: Gap" in the Type? box, and marked as "Payable to Vendor" in the Payable Type Default box. The Charges Master Code for the "GAP PAYABL" is set up the same exact way, except that the Default Ledger Account is to be set up as a credit. To the scenario, add a GAP CLAIM for $2,000.00 and then add a GAP PAYABL for -$2,000.00. These will wash to zero, resulting in a Net Capitalized Cost of $14,000.00.
4. Go to the Accounts Payable screen. There should be three entries: the $14,000.00 to the Selling Dealer, the $2,000.00 GAP CLAIM, and the -$2,000.00 GAP PAYABL. Double click on the GAP CLAIM and select the vendor. Do the same for the GAP PAYABL. (The vendor can either be the lienholder or the GAP company, whichever you prefer to show.)
You can save and finalize this quote. The Profit/Loss Statement will show the $16,000.00 ACV, the $2,000.00 in costs, and the $14,000.00 sale price. This washes the profit/loss to zero.
The accounting is now ready to be created. It will convey the following transactions:
$16,000.00 for the buyout
-$14,000.00 to pay off the lease
$2,000.00 for the gap claim
-$2,000.00 for the gap payable
$16,000.00 for the lease payoff
A debit for the lease accumulated depreciation
A credit for the lease depreciation start value
A credit or debit for the gain/loss on on the asset sale
$14,000.00 to the insurance company
-$16,000.00 from the insurance company to vehicle sales
$16,000.00 ACV to costs of goods sold
-$16,000.00 ACV to vehicle inventory
This will properly set up the future payable for the remaining $2,000.00 gap payment.