How to Balance
This is for leases only.
The lease portfolio is balanced by an actual cash received method or by a receivables method.
Balancing should be done on a month boundary basis, but that is not required. You are in control of your balancing cycle boundaries. The terminology used here assumes that balancing is done on a month boundary basis.
Steps to Balance
Input all leases for the month. It is up to you as to what to do about new leases received late in the day on the last day of the month. You should post these new leases in the same month that they were officially funded.
Post all payments for the month with a posting date in the same month. It is up to you as to what to do about payments received late in the day on the last day of the month. If these payments are to be included in the balancing for that month, then they must be entered with the posting date set for that month.
If a billing needs to be run, it should be run before the balancing reports are run. Billing must be run at least once per month, even though you may not send out statements.
Run Balancing Reports
The reports that are run depend on how you balance.
Actual Cash Received Method
This method is common among banks and credit unions and is based on actual cash received. The balancing reports are:
Cash Receipts Journal
Go to the last page of the Cash Receipts Journal report. The "Cash In Ledger Account" amount should match your Lease Car Payments ledger account. If it does not, you will need to do an item by item match until you find the difference(s). Make the appropriate corrections and rerun this report.
Payment Distribution Reports
You need to make sure that nothing was inadvertently changed in a month previous to the one that you are balancing.
Go to the last page of the Payment Distribution Report. Get the same report from the previous month and go to the same page. Compare the amounts under the Ending Balances heading from the previous month to the amounts under the Beginning Balances heading for the current month. They should match. If they do not match, then you will need to rerun the report for the previous month and do an item by item match until you find the difference(s). Make the appropriate adjustments and start over with the Cash Receipts Journal.
You are now ready to make your ledger entries for the month. Locate the "Location Summary" on the Payment Distribution Report. There is a heavily outlined are entitled, "Ledger Account & Adjustment Summary." Debits and credits for the month are listed here. (If you have additional monthly payments set up that are NOT taxes, then you will also need the Payment Distribution AMPTax Summary report for a more detailed breakdown of the Lease Car Tax amount.)
Normally, you would use the adjustments from the Location Summary. However there are instances where you would not:
a. If you have separate ledger accounts for new and used vehicles, then you should use the Vehicle Condition Summaries.
b. If you do not use separate accounts for new and used vehicles, AND have multiple locations, AND use the same accounts for ALL locations, then you should use the Grand Totals (or, combine the locations and use the Location Summary).
Interest Accrual Simulation
The Interest Accrual Simulation will allow you to simulate interest accrual. Keep in mind that ALMSys does not accrue interest on a daily basis and this report is not to be used in balancing ALMSys.
The Suspense Detail report is used to verify the amount in the suspense account as a result of the ledger entries made for the month.
This method is common in automobile dealerships and leasing companies.
Cash Receipts Journal
The Cash Receipts Journal should be run whenever you post the daily payments received. Run the report with the date range set to the day on which you posted the payments. The "Cash In Ledger Account" amount should match the deposit that you are making.
If you leverage your financing and have set up ALMSys to reflect this, then give the Leveraged Financing Cash Deposit by Bank report to the bank with your deposit. This report contains the bank's loan numbers and they will appreciate having this report.
New Lease Detail
The New Lease Detail report contains all of the detail amounts that were added to the portfolio as the result of adding new leases.
Detail Billed Reports
The Detail Billed: Summary by Code report contains all of the new (current) receivable billed amounts for the month. Year-to-date and life-to-date (or "lease-to-date") amounts are also present on this report.
The Depreciation Report contains the period book amounts for depreciation. At fiscal year end, year-to-date tax information is provided also.
Depreciation Disposition Report
The Depreciation Disposition Report contains the gain/loss amounts for the month. You may need to run the report for the month prior to the calendar month which you are balancing, as the report goes off of the depreciation end date (which is usually set to the last day of the month prior to the month in which the vehicle was terminated).
Lease Amortization Status
The Lease Amortization Status report shows "perfect world" receivables, based on the lessees making their payments on time every month.
Journal Entry Detail and Summary Reports
Although the New Lease Detail, Depreciation, and Lease Amortization Status reports will give you receivables information, there is a better method of attaining this information. Use the Accounting Interface Exports procedure. If you have established your ledger account information for Locations, AMPTax, and Lease Charges, then the Journal Entry reports on the Results page will give you journal entry data with ledger account numbers. Even though you may not use the resulting export data, you will get the journal entry data required to balance your ledger.
Other Reports of Interest
The Aging report shows aging and delinquency information, grouped by Current, 1-14 days, 15-29 days, 30-59 days, 60-89 days, and 90+ days.
The Delinquency report shows all delinquencies through the end date provided.
The Payoff Journal shows all of the leases that were terminated for the date range given.
Leveraged Financing Payoff Journal
The Leveraged Financing Payoff Journal shows all of the leveraged financing that was terminated for the date range given.
The Security Deposits report shows the security deposits of all active leases through the end date given.