Dealer Vu lesson – AP Floor Plan Payouts & Curtailments Page 1 of 6 Title/task or Concept: AP Floor Plan Payouts and Curtailments
Module: Accounting
Audience: In order to perform this task the student should be knowledgeable about the concept of dealership floor planning and about how DealerVu creates a floor plan AP Vendor Invoice (Unit) for each unit purchased.
Introduction/background/scenario:
Each unit purchased for stock by the dealership may be financed with an specific invoice or note payable on that unit using a floor plan facility provided by an arms length financial institution. Normally, by the terms of the floor plan agreement between the dealership and the floor plan company, whenever a unit is sold the floor plan invoice or note registered against that unit must be paid out within the time period specified by the floor plan agreement.
On occasion units that remain in stock for extended time periods may exceed the maturity date specified by the floor plan invoice or note payable. In that case the floor plan finance company has the right to request that a curtailment payment be made on that invoice to reduce their exposure to depreciation of the unit while in the dealership stock. In order to enforce the terms of the floor plan agreement the floor plan finance company by having a representative regularly audit the dealership by physically counting their units under floor plan financing.
Therefore payments for sold units are required shortly after units are sold by the dealership. If the floor plan finance company representative discovers that units have been sold and not paid out, payment for those units will be demanded immediately. Also, the representative will collect monthly interest accrued on the units financed plus, if applicable, insurance on those units while held in inventory.
Lastly, payments made by the dealership to the floor plan finance company are either by computer printed check or via an electronic funds transfer. The units paid out or paid down with a curtailment must be itemized on the payment transmittal in order for the floor plan finance company to apply the payments to the correct unit floor plan invoices. What’s in it for me?
Compliance with the terms and conditions of floor plan agreements is extremely crucial to the maintenance of a good credit record for the dealership. Repeated violation of the terms and conditions of these agreements can result in higher interest rates on financing and even the removal of units from the dealership by the floor plan finance company if a significant number or value of units is discovered as sold and remain unpaid.
Dealer Vu lesson – AP Floor Plan Payouts & Curtailments Page 2 of 6 Goals/objective: To be able to payout or pay down floor plan payable invoices by
issuing a check or by recording the settlement made through the use of an electronic funds transfer system. Here’s how:
1. Select AP Transactions->Vendor Payment
2. Select Unit Invoices and interest/insurance AP Vendor Invoices 3. Indicate value to pay for each selected invoice
4. Option 1: Pay by Check, print immediately or post and print later in batch run 5. Option 2: Record electronic funds transfer and post payment
Dealer Vu lesson – AP Floor Plan Payouts & Curtailments Page 3 of 6 Step 2 - Select Unit Invoices and interest/insurance AP Vendor Invoices
On the top toolbar click on the Add Item icon to open the Select Invoice screen.
When paying out or down floor plan invoices you may choose to select from a list of all invoices attached to the floor plan vendor or to locate and select specific units by stock number or VIN.
Selecting from vendor listing of invoices:
Click the drop down arrow in the Vendor field and just type the first few characters of the vendor name. Select the correct vendor from the list and click on the Refresh button. Remember that you can sort the list by clicking on any of the headings in any one of the columns displayed. Note that the Description column contains the Stock# and VIN of each unit on an AP floor plan vendor invoice:
Dealer Vu lesson – AP Floor Plan Payouts & Curtailments Page 4 of 6 Click on the left column checkbox to mark unit AP invoices then click the OK button to
add the selected invoices to your payment screen. Selecting by Stock# or VIN:
Alternatively you can find and select units by Stock# or VIN. Note that the Stock# and VIN fields are marked with a green asterisk indicating that anything entered in either of those fields ignores all other search criteria. Just enter a stock# or partial VIN (use any number of the last digits of the VIN from the right of the number) then click Refresh to locate. The filter will narrow down the selection so that you can click the checkbox and click OK to select for the payment screen. If you want to choose another invoice for payment just click on the Add Item icon on the toolbar and repeat the process until all units are pulled onto your payment screen.
Step 3 - Indicate value to pay for each selected invoice
On the payment screen you can edit the value to be paid for each invoice by typing in the payment amount in the Amount Paid field on any selected invoice line.
Note:
If you right click on any of the invoice lines you can open the Vendor Detail record that allows you to check the vendor account or open source document (the AP vendor invoice) to examine the invoice detail.
Dealer Vu lesson – AP Floor Plan Payouts & Curtailments Page 5 of 6 Step 4 - Option 1: Pay by Check, print immediately or post and print later in batch run
To pay the select invoices by check and immediately print the check, either click File->Print Check or press F10.
When the printer dialogue box opens, click Ok to move forward to the check number confirmation/selection pop-up. If you want to cancel out of printing the check you need to click Cancel. PLEASE NOTE: Once you have clicked OK the check is committed to be printed.
If you want to post the check and add it to a batch for printing later, just click on the Post icon on the toolbar. Later the batch can be printed by selecting File->Unprinted Checks from the AP Transactions screen.
Step 5 - Option 2: Record electronic funds transfer and post payment
If you need to only record a payment made via an electronic funds transfer system or a hand-written check, click on the Check tab of the payment screen and then click on the Overwrite checkbox. Enter the payment reference in the Check# field then click on the Post icon to post the payment.
Dealer Vu lesson – AP Floor Plan Payouts & Curtailments Page 6 of 6 Connections to Other Areas/Modules:
• Related reports - Floor Plan (note: this report will not show non-Unit AP Vendor Invoices (i.e. interest, insurance or adjustment invoices),
• Related reports - AP GL Subledger Report • Floor plan GL account shows postings
• Unit Inventory->Unit Detail records allows you to access floor plan invoice. Amount Paid shown in bottom right of invoice
What can go wrong & what can you do about it? 1. Can’t find a floor plan AP Unit Invoice
The unit AP Vendor Invoice is not in Posted status. Locate the invoice through the AP Transactions screen and select Posted and then click Save. Re-do your check and the invoice will be available for selection.
2. Posted or issued check for wrong amount
Locate the invoice through the AP Transactions screen and open the payment up on screen. Click on the Void Check icon on the toolbar to create a VOID posting. You must click on the Post icon in order to post this VOID check document. Note that you can alter the date if you need to but you should not date the VOID before the date of the original check. The void check function with return the AP invoices to unpaid status allowing you to re-select them and pay whatever amount you want on another check payment.
