This article will cover a Customer Order > Unit Deal with a Trade In that has a Lien Payout
What is a Lien and why does it need to be paid out
When the Customer purchased the trade in unit, they financed the purchase and the finance company put a lien over the unit
A lien means that if the finance company is not paid in full for the amount due, they can seize the unit and sell it to recoup the funds owing to them
For example
Mr Smith is trading in his unit on a brand new purchase
On the trade in unit, Mr Smith still owes a finance company $2,000
This $2,000 will need to be taken into consideration when calculating the figures for the purchase of his brand new unit
It will also be the responsibility of the Dealership to payout the lien / amount owing on the trade in unit so that when the Dealership resells the unit, it is sold with clear title ie no lien
How to account for a Lien Payout on a Customer Unit > Unit Deal - Trade In Unit
There are two fields in the Trade In section of a Customer Order > Unit Deal - Trade In - to allow the Dealership to record that the trade in unit still has $$ owing to a finance company (Lien Payout)
The first field is:
Once an amount is typed in the Lien Payout field, the 2nd field will populate - Finance Company
In this field the Dealership will need to record which Finance Company is still owed $$ to, on the Trade In unit
The Trade In section will now look like this:
If there is no Lien Payout, then you would leave the Lien Payout field blank
Finance Company
If the Finance Company is not listing in the drop down, then you will need to review if the Finance Company is setup as a Vendor in Blackpurl
If the finance company is not setup as a Vendor in Blackpurl then you will need to:
- Create a new Vendor for the finance company - How to Create / Add a New Vendor
- Then add a Product and Service (Finance Company) to the new Vendor.
If the Finance Company is already setup as a Vendor already exists in the system, you will need to navigate to the Vendor Record
- Add a Product and Service (Finance Company) to the Vendor.
Accounting Integration
Lien Payout Clearing General Ledger
If you have Accounting Integration - there is a Control Account that you will need to update - Lien Payout Clearing
Purpose of the Lien Payout Clearing General Ledger
- This is basically a clearing General Ledger that Blackpurl needs to post any Lien Payout to
- The Lien Payout will go into this General Ledger for the system to automatically create a Vendor Invoice for the amount due to the outgoing Finance Company
- Lien Payout General Ledger should always go back to zero - it is a true clearing account
- An example of this clearing account in QuickBooks Online
- When the Dealership needs to payout the Finance Company for the Lien Payout, there will be a Vendor Invoice already in your accounting package to allocate your payment to
- An example of this Vendor Invoice in QuickBooks Online
