Main Menu - Payment - Payoff
Used to terminate leases and to quote payoffs. DO NOT USE THIS FOR LOANS.
The payoff wizard will make an attempt to determine what exactly is happening at payoff time. Most of the payoffs that you will perform will follow this wizard's logic. However, programs are not perfect and do not think like us humans. Therefore, you should keep a skeptical eye open.
Layout / How To
Answer (to the best of your knowledge) the three questions on this page.
1. Has the vehicle (or collateral) already been turned in? If so, please provide the turn-in date.
2. Are you repossessing the collateral? Voluntary surrenders count as a repossession.
3. Is the lessee purchasing the collateral?
Press the Next button after answering the questions.
All of the payoff choices available to this lease will be displayed. Payoff choices are derived by what has been billed and what is outstanding to be paid. The first payoff choice is ALWAYS the last fully paid invoice.
Based on the current payment history, amortization schedule, and your answers, ALMSys will tell you what it thinks you need to do. Payoff quotes are good until another transaction is posted against the payment history. (Remember, there is no daily interest for leases.)
Most of the time, you will simply be positioned to a specific payoff choice and told that ALMSys has chosen this entry. However, many other conditions may occur and you may be told that additional billing needs to be done. Or, you may be requested to waive late fees or refund overpayments.
Make sure that you understand what ALMSys is telling you. If you have questions, CALL!
Note: If you need to stop the billing process for a lease that is awaiting termination, you may do so by posting a zero amount payoff. However, you should be warned that subsequent payoffs only allow principal amounts to be entered. If you are making a normal payment as part of the payoff amount, you will need to exit the payoff screen and purge the zero amount payoff transaction, first. You may then post normal payments as part of the payoff.
If you simply wish to print a Payoff Fax Sheet, then press the Payoff Fax Sheet button. Your choice from the grid will be preserved on the fax sheet.
To make a normal payoff, select the type of payoff (on the left), select the payoff choice listed, set the date of the payoff, and press Next.
Repossessions do not follow any of the rules. Payoffs for repossessions are usually in two parts: 1) For the initial auction or sale of the vehicle, and 2) The resulting write-off of the remainder of the unpaid asset. ALMSys allows multiple payoffs to occur. In fact, you may post as many payoffs as necessary to get to a zero asset balance. For the initial sale of the vehicle, fill in the amount of the sale in the Principal Amount field, set the Post Date, and press Next.
There are three types of payoffs:
1. Completed Lease. This is a lease that has gone to normal lease end termination.
2. Early Payoff. This is used when a vehicle is being turned in before normal lease end termination.
3. Repossession. This is used when a vehicle is repossessed, typically due to lack of payment or failure to provide adequate insurance.
Upon termination, the security deposit is either kept (in the event of repossession) or returned to the lessee (possibly via the lessor). This distribution is indicated in the Security Deposit Distribution area.
ALMSys understands that almost everyone does different payoff calculations. It would be nearly impossible to come up with a "one size fits all" termination screen. Therefore, ALMSys will allow you to export termination-related data to an Excel spreadsheet. Here's how it works.
In the ALMSysSQL\Documents folder, there is a file called, "PayoffWorksheetTemplate.xls." This spreadsheet is initially set up with two sheets: Data and Worksheet. The Data page is OFF LIMITS to you as it is where ALMSys will place its data. The Worksheet page is where you may edit and set up your own calculations.
It is important to know that when you press the Payoff Worksheet button, a copy of PayoffWorksheetTemplate.xls is placed into your personal ALMSysSQL\Users folder, and then Excel is opened up to that copy. From there, you may save it under whatever name you want. If you need to make an overall change to the template, you must SAVE AS back to the ALMSysSQL\Documents folder.
You may add as many pages as desired. However, the Data page MUST BE FIRST.
ALMSys exports the data as named fields in the spreadsheet. This way, you would not need to reference the interest rate as DATA!B10, but rather simply as LeaseInterestRate. In fact, there is no guarantee that the fields will always "land" in the same cells on the data page, so you will definitely want to refer to them by their names.
All of the field names are listed in the "A" column on the DATA page. You should be able to tell what the fields are by their names. Fields that begin with "CalcLF" are from Leveraged Financing. If you cannot find a field, or wish to know what a specific value represents, please contact Support.
For those leases that have calculation type 1 (standard), each month's interest has been deferred to the next month. ALMSys "catches up" when the last invoice has been created for the term month of the lease. If most cases, this will cause no problems. HOWEVER......you need to understand how ALMSys accounts for this type of lease.
Say, for instance, that John Doe's lease is for 36 months and month 36 has just been billed. The payment is not due for two weeks. At the end of John's amortization schedule is an LEV amount of $55.00. Again, the $55.00 represents month 36's interest. When month 36 was billed, ALMSys debits the asset account for the $55 in order to bring the account to the residual value (end value). The corresponding credit is the interest account.
IF AND ONLY IF John wishes to pay the lease off BEFORE his due date for month 36, you would typically want to quote a payoff for month 35. In this situation, the payoff is incorrect because of the $55 asset debit as a result of the billing for month 36. The only way that you can obtain an accurate payoff is to PURGE the billing transaction for month 36. This will present a problem only if you have already balanced for the period that included the month 36 billing date. If this is the case, you will need to manually adjust your ledger for the $55 (credit asset for $55, debit interest for $55).
The ALMSys payoff wizard is keenly aware of this type of lease and will warn you when this situation arises.
The last page will allow you to review your payoff selection, possibly select the lessee's termination decision, and possibly indicate that the vehicle is going into inventory. If all appears correct, press Post Payoff As Indicated.
If you are repossessing, you will be asked if you desire a Repossession Summary report. If you select yes, then the report will display after the payoff has been posted. Upon closing the report viewer, you will be taken back to the Payoff Choices page. Remember, the payoff has already been posted, so if you do not wish to post the write-off amount at this time, Cancel.
When paying off a lease for the first time, the Termination Proceeds field on the Depreciation screen will be set to the principal amount of the payoff. Also, the End Date field will be set to the last day of the month prior to the payoff date.
If the leveraged financing is to terminate, you must terminate that separately from the Leveraged Financing screen.
Vehicle Check In
If you are the lessor, then the Vehicle Check In Report or the Vehicle Termination Worksheet may be of use.
Payoff Fax Sheet