Processing Leasing Agreements

This document explains how you create and maintain a leasing agreement for a specific rental object.

The rental agreement is processed when a customer decides to rent an individual item for one or more years, instead of purchasing the item.

Outcome

The rental agreement you have created for the customer:

Leasing agreements are used when a customer prefers to rent an individual item on a long-term basis instead of buying the item. The reasons for the customer to choose leasing could be to free up capital for the core business and/or to increase flexibility in the choice of equipment.

For the rental company, a leasing agreement allows:

For details, refer to the following sub-processes:

Before you start

Follow These Steps

  1. Creating leasing agreement

    You create a leasing agreement when the customer orders the rental object. The customer will pay a fixed rental fee each month, which includes costs for leasing, service and administration.

    This process consists of:

    • The creation of an agreement header with general agreement information.
    • The creation of one or more agreement lines that specify the rental object and the scope of the service agreement.
    • The calculation of the monthly rental fee for the customer during agreement line creation.
    • The printing of the leasing agreement.

    You start the registration of the agreement in 'Leasing Agreement. Open' (LTS100)

  2. Starting leasing agreement

    You activate the agreement when the rental object is delivered to the customer. If the agreement has been created with a temporary individual item, this is exchanged for the real rental object.

    You activate the rental agreement in 'Leasing Agreement. Open' (LTS100).

    In connection with delivery, the funding of the rental object is arranged with the bank or financial institution.

    You enter values for funding in 'Leasing Funding. Open' (LTS200).

  3. Amending leasing agreement

    A current rental agreement may need changes. Maybe the rental object has been moved, or the agreement time has been changed.

    You can use the following activities to make changes to an agreement:

    • Change service information in 'Leasing Agreement. Open' (LTS100)
    • Change interest rate in 'Interest type. Open' (LTS402)
    • Amend leasing information in 'Leasing Agreement. Open' (LTS100)
    • Move object in 'Leasing Agreement. Open' (LTS100)
    • Change index in 'Price Index. Open' (LTS400).
  4. Invoicing leasing agreement

    Depending on the settings, the agreement is invoiced in advance or arrears, monthly, quarterly, or at any other specified time interval.

    You invoice the rental agreement by:

    • Creating an invoice proposal in 'Leasing Invoice proposal. Create' (LTS800).
    • Confirming the proposal in 'Leasing Invoice proposal. Open' (LTS810). In practice, a service order is generated.
    • Generating and printing the invoice in 'SO Invoice. Print' (SOS180).
  5. Terminating leasing agreement

    Termination takes place either when the agreement has come to its end or the customer calls to end the agreement.

    To terminate an agreement you:

    • Enter a termination date in 'Leasing Agreement. Open' (LTS100)
    • Enter a termination fee, if applicable, in (LTS103)
    • Print out collection documents in 'Leasing Agreement. Print Agreement Documents' (LTS610).
    • Check in the returned rental object in 'Individual Item. Check-in' (STS130)'.
  6. Follow-up

    When the agreement is terminated, it is time to settle the final bill.

    The final invoice is examined and adjusted for additional charges and/or crediting in 'Rental invoice. Display/Credit' (STS350)

    To create a credit note:

    • Select an invoice in 'Rental invoice. Display/Credit' (STS350)
    • Generate an invoice proposal in 'Leasing Invoice proposal. Open' (LTS810)
    • Print out the invoice in. 'SO Invoice. Print' (SOS180).
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