Processing Rental Agreements

Outcome

• The rental agreement created for the customer is terminated and a final invoice is the General Ledger.
• The rental item is checked in and will be sent to an inspection location or sold or rented out.

In a rental company, rental agreements are used:

• When a customer wants to rent an item
• To rent out serialized items (machines) and non-serialized items
• To sell consumable items or rental items that have been delivered, but have not been returned by the customer

See the respective sub-process.

Before you start

• An order type configured for rental agreements must exist in 'Rental Agreement Order Type. Open' (STS020).
• The parameters controlling how the rental agreements are processed and displayed must be defined in 'Settings – Rental Agreements' (STS699).

Follow these steps

1. Entering a rental agreement

   You start the registration of the agreement in 'Rental Agreement. Open' (STS100). You create the agreement header with general agreement information. Some values are defaulted from the agreement order type to the agreement header.

   Agreement lines are created in 'Rental Agreement. Open Lines' (STS101). You create agreement lines with information about the equipment that will be rented. The rental item can either be a unique rental item (an individual item) or a serialized (machine) or non-serialized item.

   To differentiate between renting out individual items, cross-hire, sale of items, and purchase orders, you must enter an agreement line type in 'Rental Agreement. Open Lines' (STS101). This definition controls how the line will be processed in the future.

   There are also options in 'Rental Agreement. Open Lines' (STS101) that let you enter text, charge, or other credit information. You can also enter stand-down periods on each agreement header or agreement line.

2. Monitoring

   The available rental equipment is displayed in 'Individual Item. Display' (SOS550). Enter search criteria depending on the line type. The line type is defaulted from the agreement order type, but can be changed for each line. Valid search criteria are the alternative identities that can be processed in the agreement line entry, such as individual item number, model name or item number.

   If an item number is entered as search criteria, the system checks and displays available items in different warehouses through the standard M3 ATP function. This lets you select another warehouse if there is a shortage.

3. Delivering rental items

   The equipment is delivered to the customer and is checked out in 'Individual Item. Checkout' (STS135).

   Each agreement number has at least two distribution orders connected to it: one for the delivery and one for the returns.

   The picking and delivery of the agreement must be registered on the connected distribution orders in line with M3:s standard functionality, 'Picking List. Report' (MWS420).

4. Invoicing rental agreements

   The invoice process consists of the following steps:

   • Create invoice proposal in 'Rental Invoice Proposal. Create' (STS800).
   • Check out and confirm invoice proposal in 'Rental Invoice Proposal. Update' (STS810).
   • Print invoices in 'SO Invoice. Print' (SOS180).

   You can invoice everything that has not already been invoiced, up to the next order date.

5. Exchanging/terminating rental agreements

   Exchanging Rental Agreements – When an existing unit is out on rent and the unit needs replacing, it must be exchanged. You must track exchanges to ensure that invoicing and rental revenue can be calculated. You can automatically generate the new rental line using option 35='Create exchange' in 'Rental Agreement. Open Lines' in (STS101/B1).

   Terminating a Rental Agreement – Rental agreements are terminated in 'Rental Agreement. Open' (STS100/B). You can terminate the entire agreement (and all the items connected to it) or just individual item lines in the agreement.

   Note: You can also print a termination note if the customer wants a document that states that the agreement is no longer valid.
6. Returning a rental item

   Each agreement number has at least two distribution orders connected to it: one for the delivery and one for the returns. The picking and delivery of the agreement must be registered on the connected distribution orders in line with M3:s standard functionality.

   You register that the equipment has been returned by the customer in 'Individual Item. Check-in' (STS130).

   When the rental equipment is checked in, the equipment can be graded as available again or graded for service. If you have rented out multiple items and not all of the quantity is returned, you can create a sales transaction for the unreturned quantity.

7. Follow-up

   The purpose of the rental statistics is to manage the rental fleet by tracking the utilization of equipment and monitoring the rental revenues and costs per individual. You create sales statistics (based on the invoiced SO lines) for service on rental equipment and for invoiced rental agreement lines. The sales statistics contain the invoiced amount and costs, such as administrative costs and average or standard costs for consumable items.