|Oracle Lease and Finance Management Implementation Guide|
Part Number E13577-05
This chapter covers the following topics:
Oracle Lease and Finance Management, an Oracle E-Business Suite application, integrates Oracle Financials applications and is designed to meet the business requirements of asset-based finance companies spanning the entire lease life cycle. The Oracle Lease and Finance Management solution extends from lease origination to contract termination and asset disposition.
A foundation of Oracle E-Business applications—General Ledger, Assets, Inventory, Payables, Order Management and Receivables—along with key customer relationship management applications such as CRM Foundation, Install Base, Credit Management, iStore and WorkFlow, underpin Oracle Lease and Finance Management.
Oracle Lease and Finance Management provides E-Business functions that can be described from at least two perspectives:
Operations—that is, the daily tasks and responsibilities of people who work in various departments of finance companies, as well as
Business Flows—the processes that every lease or loan goes through in its path over time, from beginning-to-end, from the lessor's point of view.
From the Operations perspective, people who manage lease contracts and assets define Oracle Lease and Finance Management functionality. From the Business Flow perspective, the processes that finance companies carry out across the entire company in the life cycle of a lease or loan, from inception to termination, also define Oracle Lease and Finance Management functionality.
Oracle Lease and Finance Management attempts to present its many useful features according to equipment leasing industry key business flows. Features are arranged sequentially according to how they are used for typical tasks in a lease transaction.
Starting from a first potential business opportunity, Lease and Finance Management supports the effective matching of lessor or lender with lessee or borrower. A salesperson identifies a prospect's needs, identifies available assets, and provides alternative financing options to structure the lease and calculate the cost basis.
Once you have set up the marketing and program controls, you can process transactions and events through the lease life cycle using the objects you have defined. As you identify potential deals, you may need to provide sample pricing to qualify leads. Sample pricing can be performed without identifying a prospect party. Once you have identified the prospect and a specific lead, you can begin tracking the opportunity.
The opportunity provides a central repository for you to store information about other activities relating to the deal. It also provides a data structure that allows you to create sales forecasts.
The Lease Sales Quote to Credit Decision process contains the Opportunity to Lease Sales Quote and the Lease Application to Booking process.
Once you identify a prospect and create an opportunity, more specific pricing may be generated. In addition to adding new pricing estimate scenarios on the Lease Opportunity, you create Lease Sales Quotes by selecting specific inventory items, fees, services and other quote adjustments to reflect the most accurate possible deal . You can then obtain pricing approvals and indicate prospect acceptance on a Lease Sales Quote. Only one lease quote may be accepted for a Lease Opportunity.
After parties agree upon a lease contract, the Lease or Loan Authoring functionality books the contract, creates financial streams, and enters journal entries.
When you select an asset, disbursements functionality deals with paying the vendor or dealer for the asset. Disbursements also pays for service and maintenance costs collected from the lessee and owed to a third-party provider.
The Origination to Funding processes take the lease sales quote through credit approval, vendor payment, contract authoring, and activation, to a booked lease or loan.
Oracle Lease and Finance Management uses Oracle Credit Management, Install Base, Assets, Inventory, Payables and General Ledger to manage the credit, origination, approval, contract authoring, vendor payment, and asset tracking functions. It performs stream generation and pricing, and interfaces with third-party lease financial and price modeling software.
After you activate a lease, billing functionality generates and sends invoices to lessees or borrowers. Often a lessee has assets at multiple locations under the same lease, and billing has the flexibility to account for many types of variations.
For example, one variation of billing is usage-based billing. This functionality provides billing based upon the usage of the asset as evidenced from meter readings.
Payments functionality allows either the lessor or the lessee to initiate the transfer of funds to pay invoices. Transfers occur in the form of a direct debit, check, wire transfer, credit card, and so on. The Payment process searches for the appropriate invoice to apply the funds and creates accounting entries upon application of funds to the invoices.
As a result of a missed payment, a collection effort may be initiated. Collections and litigation functionality manages the collection process from the point of initially identifying a delinquent customer to the end of the delinquency.
The Quote to Termination functionality manages repurchase, restructure, and contract termination alternatives when the lease or loan expires. Oracle Lease and Finance Management processes restructured contracts through contract authoring, stream generation, analysis, and approvals used in contract authoring, to activation and booking.
When you accept a termination quote for sale, assets are retired in Oracle Assets. Oracle Lease and Finance Management also supports partial terminations and uses Oracle Receivables, Credit Management, Assets, CRM Foundation, WorkFlow, and General Ledger to manage the Quote to Termination functions
Oracle Lease and Finance Management handles requests for renewals, or termination quotes, by initiating a quote for terminating the lease, identifying the formula, calculating, storing, consolidating and modifying the termination quote. When you complete the quote several transactions are managed, including Approve termination request, Complete contract termination, and Update asset records.
The last step in the lease transaction, remarketing the used assets, manages the disposition of assets upon expiration of a lease contract, at repossession, or at early termination. This functionality manages the remarketing process, whether by sale of the asset to a third-party remarketer, or by internal remarketing efforts.
The Asset Return to Disposal features handle asset returns, remarketing, and sales. This functionality supports shipping instructions and asset evaluation processes for returned assets. Returns may be accounted for as scrap, repurchases, or inventory to be remarketed. Oracle Lease and Finance Management enables the remarketer to establish prices, bill for costs incurred, calculate third-party commissions, and adjust inventory quantities and status for tracking.
After a lease contract is agreed upon, the Lease or Loan Authoring functionality books the contract and creates and enters financial streams and journal entries.
The Accounting processes from Period Open to Close enable accruals, loss provisions, write-downs, periodic adjustments, and journal entries specific to the asset-based finance industry.
The Inquiry to Resolution processes start with initial contact from employees, customers, vendors, and partners to the Lease Center. A customer service representative logs and tracks an inquiry through its satisfactory resolution, which is then communicated to the appropriate designated parties.
You define processes to manage specific requests, such as insurance quotes, claims, insurance cancellation, contract transfers, equipment exchanges, asset modifications, and lease renewals. You may enable customer and vendor self service.
Investor management is supported by Oracle Lease and Finance Management by recording investor agreements that provide for syndication and securitization. In addition, Lease and Finance Management provides investor billing and disbursement features.
Vendor management is supported by Oracle Lease and Finance Management in terms of recording vendor program agreements, cure and repurchase tracking, and vendor self service features.
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