Installment Payment Plan Settings

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Tabs: General, Advanced

Use this routine to create and maintain payment plans for installment receivables.

If you edit the settings for an existing installment plan, the changes do not affect customer contracts created before your edits. Only new contracts created after your changes are affected.  

General

Installment PlanTo create a new plan, enter a code of up to 5 alpha-numeric characters to identify this installment payment plan. To edit an existing plan, indicate the plan code or click the Search button to select an existing plan from the list.   

DescriptionEnter up to 30 alpha-numeric characters to describe this payment plan. Click the Action button to access the Description Field - Language Translation Entry screen.

ActiveYou can use this optional setting to define the date on which the plan becomes available. If you leave this field blank, the plan is available now.

ExpiresYou can use this optional setting to define the date on which the plan is no longer available. If you leave this field blank, the plan does not expire.

The Active and Expires fields can be used together to define a date range or independently of each other. If you define one, you are not required to define the other.

InsuranceUse this optional field to specify one or multiple default insurance plan codes. Click the Action button to access the Select Insurance window, where you can select one or more insurance plans.  

ClassificationClick the Arrow button and select the contract classification for this plan. Entry in this field is mandatory.

Minimum term is MonthsUse this optional field to indicate the minimum number of months allowed for this plan's term. Entry must be numeric and is checked during installment worksheet entry.

Maximum term is MonthsUse this optional field to indicate the maximum number of months allowed for this plan's term. Entry must be numeric and is checked during installment worksheet entry.

Default Terms TableUse this optional field to create and edit a table of default terms for this plan, based on finance amounts. Click the Action button to access the Default Terms Table window, where you can maintain the table settings.

Interest Rate is % with a CalculationYou can use this optional field to enter an override interest percentage rate and calculation method that is used when calculating interest for this plan. If you do not specify a rate here, the system looks next for a rate in Sales Tax Settings, and then finally in Installment Receivables Control Settings.

Enter up to 4 decimal places in the % entry box and then click the Arrow button to select the Straight Line Interest or Declining Balance (APR) method in the Calculation field.

First Payment Due Days After Contract Activation

Contracts Paid Within Months Qualify for Same as CashIf this is a "same as cash Type of contract where customer agrees to pay total amount due by specified date to avoid paying interest and insurance fees on financed amount. If customer pays by the due date, interest and insurance are rebated." plan, enter the number of months to be used to calculate the cash date. If the contract is paid off prior to the cash date, interest and insurance amounts are rebated.  

No Interest for MonthsUse this optional field to indicate the number of months that are "interest free" with this plan. For example, if you set this field to "3" and the contract is written for 12 months, finance charges are calculated based on 9 months. The interest is applied to payments 4-12; payments 1-3 do not include interest.

No Payments for MonthsThis field is active if you leave the First Payment Due NN Days After Contract Activation and First Payment Due On fields blank. Use this optional field to indicate the number of months that are "no payment months" with this plan. For example, if you set this field to "3" and a 12 month contract is written, the finance charges are calculated based on 12 months, but spread over 9 payments. The first payment due date is pushed out 3 months.

First Payment Due on This field is active if you leave the First Payment Due NN Days After Contract Activation and No Payments for NN Months fields blank. Use this optional field to indicate a specific (or fixed) date when the first payment is due for this plan. Click the Calendar icon to select a date.

Requires a Deposit of %, $ Use this optional setting to indicate a minimum deposit required for this plan. Enter the minimum as either a percentage or as a dollar amount. This setting is checked during Installment Worksheet entry.

General Ledger AccountsClick the Action button at this field to access the General Ledger Accounts screen, where you specify the GL accounts to be used when posting Receivables, Earned Interest, and Unearned Interest for this plan. Entry in this field is mandatory.

The following two fields are only available when the "No Payments for ____ Months" is left blank. The Review Contract Details screen displays payment terms based on these two fields, if used. The Principal column of the Contract Amortization Schedule may yield a negative principal amount for the first few monthly installments as a result of the Fixed Monthly Payment Amount.

The installments following the fixed monthly payment term on the Contract Amortization Schedule may display inflated payment amounts, reflecting the fact that the prior installments are under-charging. In the example below of a 12 month contract and an 11 month fixed payment term, the last installment is a balloon payment. The following two fields are also available to enhanced laser printing and to the data warehouse.  

Fixed Monthly Payment Amount

Fixed Monthly Payment Term

Advanced

Activate a Setting by Selecting a Checkbox

FEES - Late ChargeTo assess late fees for overdue payments during cycle processing for this installment plan, check the box at this field. Otherwise, leave the box blank.

FEES - Non-Filing ChargeTo assess document/miscellaneous/non-filing fees for this installment plan during Installment Worksheet entry, check this box. Otherwise, leave the box blank.

INSURANCE PREMIUM - Include Interest

REWRITE CONTRACTS - Merge active contracts into oneTo allow add-on sales during Installment Worksheet entry, check the box. If the box is checked, prior active contracts can be merged/re-written with contracts written under this plan. Otherwise, leave the box blank.

REWRITE CONTRACTS - Prompt User during Worksheet entry prior to merging contractsIf this plan is a "sale" type, check the box at this field. When users are merging a contract with this plan into a different plan during Installment Worksheet entry, the system issues a warning message. If this box is not checked, no prompt is displayed.