Overviews

Payment Schedule

The payment schedule is where the user sets up the number, frequency, and amount of payments due for the term of the lease or loan. The schedule set up during the application or booking process can be adjusted during and, in the case of a lease, at the end of term for lease extension.

There are minor differences between updates as to which order the user enters number, frequency, and amount for each line of a payment schedule; otherwise the following information pertains to all payment schedule setups, except as noted below.

Payment Schedule Grid Display Values

Following are the columns of the payment schedule grid with their descriptions:

Payment Schedule

Shows the payment count range covered by that line of the schedule. For example, "1 – 12", "13 – 24".

A regular (as opposed to irregular) payment schedule has the following characteristics:

• All the payment codes must have the same scale factor. For example:
  
  • "MON" and/or "ADVM" have a scale factor of 1
    
  • "WEEK" and/or "ADVW" have a scale factor of 1
    
  • "QTR" and/or "ADVQ" have a scale factor of 3
    
• All payment amounts must be the same.
  
• The payment number of the last payment schedule line must not be 999
• No SKIP payments
  

Remaining Pmt Schedule

Shows the number of payments for every entry which builds up the payment schedule. Based on the term(months), and # of accrual/billing cycles accrued, starting payment number and ending payment number of each remaining payment schedule line are displayed. This information is useful when entering irregular payment schedules for a lease.

If invoices have been produced more than 30 days before their due dates and are not yet accrued, they are ignored. Replacements for such advanced invoices will be created the first time accruals are run after an asset payoff is final.

Refer to available Examples section of this document for variation of payment schedule grid columns to appear in different updates of LeasePak.

Frequency

Enter the payment frequency code. Frequency sets how often payments are due. The standard frequency codes are dependent on the selected option of Accrual/Billing Cycles field.

Following are the valid frequency codes for each of the accrual/billing cycle set from U0801 Application - Tab3 Term/Rates:

Skip

SKIP does not indicate a specific frequency. Rather, it denotes a number of periods to skip requiring a payment due before the next part of a payment schedule resumes. For example, in the following schedule:

In the above table, payments would only be due every 4 months.

LeasePak handles income accrual during skip payments differently according to the type of lease or loan. For a Precomputed lease, LeasePak calculates and earns income according to the accrual method's schedule, completely separate from the payment schedule. For a Simple Interest lease, if the accrual method allows for skip payments, skip and non-monthly payments result in the storage of the accrued but not yet due income in the Income Receivable account. This amount is used in the next period's income calculation (in other words, it is capitalized). For an Interest Bearing Loan (IBL), LeasePak provides through the 1993 JULE Fund enhancement suite a switch at the lease level which allows interest to be capitalized during SKIP payments.

Operating Leases: Skip payments may be entered when the payment frequency remains constant, but are not allowed when frequency varies (for example, moves from monthly to quarterly). When skip payments are allowed income is recognized differently according to accrual method. See Lease/Loan Accrual Methods: Operating for more information.

Advance Payments

Advance payments are the payments due in advance. Any payment in the schedule can be specified as an advance payment. The frequency code setting also indicates if one or more payments are due in advance, meaning due at the commencement of the lease. This is different than indicating whether payments are generally in advance or arrears, which is instead controlled by the accrual method. For example, if the accrual method is AIX6, setting either

OR

will result in the same payment schedule.

On the other hand, the following settings for accrual method AIX6:

results in first month payment due in advance.

The codes for setting advance payments are:

Note that advanced payments always occur in the first month regardless of where they appear in the schedule and subsequent streams begin in order immediately following the advanced payments.

Number

Enter the number of payments of a given amount to be made. Number sets how many payments occur at a given frequency. In a regular payment schedule, all payments occur at the same frequency (for example, all monthly in advance, all quarterly in arrears) all at the same amount, and without any additional advance payments (such as last payment in advance). For regular schedules, the user will typically only need one line in the payment schedule and the number of payments will equal the number needed to cover the term. Term is always in months, so in a regular schedule, number will only equal the term if the frequency is monthly.

If advance payments are displayed, the placement, or occurrence, of the advance payments may be adjusted. However, the total amount of advance payments in the remaining payment schedule may not be altered.

If the lease is a fixed term lease with an automatic conversion to a month-to- month lease, the NUMBER of the last payment schedule must be 999.

The NUMBER 999 does not work to book a month-to-month lease for lessor accrual method as operating lease method.

Number of payments '999' indicating a month-to-month lease can only be used in the payment schedule settings for U0108 Lease Extension.

Start Date

Enter the initial date of the payment stream. The day corresponds to the lease due day. The start date depends on the accrual method selection. If selected accrual method is an advance accrual method (AXXX), the start date will be the commencement date. If the selected method is an arrears accrual method (RXXX), the start date will be the start date of next accrual period after the commencement date.

If the Commencement Date is not set, value for this field will not appear.

If booking a new lease without creating an application first, the start and end dates will be blank due to an undefined lease commencement date. Any change in the commencement date during booking will only affect the calculation of payment schedule line start and end dates after booking is completed.

End Date

Enter the final date of the payment stream. The day corresponds to the lease due day. For all leases:

ACCRUAL/BILLING CYCLE = START DATE + NUMBER OF ACCRUAL PERIOD IN STREAM - 1 ACCRUAL PERIOD

If the Commencement Date is not set, value for this field will not appear.

Amount

Enter the amount of the payment. Do not include use tax. LeasePak automatically calculates use tax amount at time of accrual. If asset yields are used for the portfolio, when the application is booked, the average payment amount of the payment schedule must equal the sum of the payment amounts of each main asset tied to the lease/application.

If the lease has vendor or investor income participation, a payment schedule of variable amounts should not be entered. The schedule may have skip payments and/or multiple advance payments, but the payment amount must be the same throughout the lease term.

Following is an illustration of a bi-weekly contract payment schedule:

• The first line showing payments 1 - 2, are advance payments of $500.00 due at commencement.
• The second line containing payments 3 - 9, are 7 bi-weekly payments, (due after every 14 days), starting from 1/29/2018 to 4/23/2018.
• The third line containing payments 10 - 11, again are 2 bi-weekly payments that are due from 5/7/2018 to 5/21/2018.
• The fourth line containing payments 12 - 18, are 7 skip payments which means there will be no bi-weekly payments in the period of 6/4/2018 to 8/27/2018.
• The fifth line containing payments 19 - 37, is set to make 19 bi-weekly payments in the period of 9/10/2018 till 5/20/2018.
• The last line containing payments 38 - 39, is set to have 2 bi-weekly payments due in the period from 6/3/2018 to 6/17/2018.

Examples

Payment Schedule

This variation for the initial setup of a payment schedule appears in:

• U0101 Book Lease
• U0108 Automatic Lease Extension
• U0108 Lease Extension
• U0116 Rebook

U0801 Application

This is similar to the first grid example, except that the order of Number and Frequency columns is flipped.

U0901 Book Notes Payable

This is similar to the first grid example, exept that Start Date and End Date columns are missing.

Remaining Pmt Schedule

This variation for midterm adjustment updates appears in:

• U0103 Partial Asset Payoff
• U0104 Payment Reschedule
• U0113 Asset Add-on

U0103 Partial Asset Payoff Reversal

This is similar to the previous grid example, exept that Start Date and End Date columns are missing.

U0904 Principal and Schedule Adjustment

This grid from the Notes Payable update is similar to the U0103 Partial Asset Payoff Reversal example, exept that the first column is labeled "Remaning Payment".

R0502 Application Inquiry

This is how the grid appears in the R0502 Application Inquiry report.

R0905 Lease Inquiry

This is how the grid appears in the R0905 Lease Inquiry report.