Step 4L - Understanding Accounting Integration - Control Accounts - Lien Payout Clearing

This article is Step 4L of Understanding Accounting Integration - Control Accounts > Lien Payout Clearing

To see all the steps of Understanding Accounting Integration, please review - Overview - Understanding Accounting Integration

Step 4L - Control Accounts - Lien Payout Clearing

• Let us first define what a Lien Payout actually is - it is the amount payable to a finance company to give the Dealership a clear title to a Unit that has been traded in.  

• This General Ledger account is used as a clearing account and the account type is typically set up as a Current Liability.  At any one time the Dealership will be able to see from the balance of this Lien Payout Clearing General account how much is owed on lien payouts

• When a Customer Order > Unit Deal containing a lien payout on a trade-in, is finalized but the Dealership is still responsible for paying out the lien

• Once the Unit Deal is finalized, the lien payout amount will be credited to the Lien Payout Clearing General Ledger account 

• When the Dealership is ready to payout the lien, they have two options:

Option 1 

• Manually create a Vendor Invoice for the relevant Finance Company for the lien that needs to be paid out and allocate the line item to the Lien Payout Clearing General Ledger account

• Then pay the lien attaching the payment to this Vendor Invoice

Option 2 

• Pay the relevant Finance Company for the lien directly from your bank and allocate the payment directly to the Lien Payout Clearing General Ledger account

• Both of the above options will get the desired result - the lien will be paid and a clearing entry will be made to the Lien Payout Clearing General Ledger account

• The Lien Payout Clearing General Ledger account is cleared for that transaction