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Oracle Lease and Finance Management User's Guide
Release 12.1
Part Number E13583-05
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Cures, Repurchases, and Refunds

This chapter covers the following topics:

Set Up Cures, Repurchases, and Refunds

Cures are payments that the vendor makes to the lessor, because a lessee did not make the required payments according to terms of the lease.

Repurchases occur when the following happen:

Refunds occur when the lessee makes a payment on a delinquent contract after the vendor has made a cure payment. Vendor program agreement terms and conditions determine how the lessor refunds the vendor.

To use the cure, repurchase, and refund features of Lease and Finance Management, setups are required in three areas:

In Lease and Finance Management Implementation:

  1. Define Accounting Templates specific for Cures, Repurchases, and Refunds; AND

  2. Define the Vendor as a Party for Billing.

On Vendor Program Agreements: Terms and Conditions (T&Cs) Sets.

  1. Define Collections Cure and Repurchase Terms and Conditions (T&Cs) Set for cures, repurchases, and refunds); AND

  2. Define two T&Cs for Termination Quote values for the Vendor: Early Termination of Contract, and End of Contract Term.

On Contracts:

  1. Specify the Negotiated Amount; AND

  2. Specify offset contracts, if applicable.

Implementation Details

Perform the following steps:

  1. Set up for AutoInvoice and Oracle Workflow. Set up the Vendor as a Party for Billing. See the Oracle Lease and Finance Management Implementation Guide.

  2. Create Cure-specific accounting templates on the Lease financial product. The Stream Type and Transaction Types must be set for Cure. Use the template suggestions in the following table as examples for your accounting templates.

Accounting Template Examples
Accounting Template Name Effective From Stream Type Transaction Type Template Lines
VENDOR CURE CREDIT MEMO [enter Date] CURE Credit Memo Debit and Credit
VENDOR CURE BILLING [enter Date] CURE Billing Debit and Credit
VENDOR CURE DISBURSEMENT [enter Date] CURE Disbursement Debit and Credit

Vendor Program Agreements Details

Perform the following steps:

  1. Define two Terms and Conditions for Termination Quotes calculations:

    Early Termination of Contract, and End of Contract Term

  2. Define Terms and Conditions (T&Cs) Sets for Collections. Set up the terms for each:

Collections Cure T&Cs:

Is a cure applicable? Yes [or No]. Must be Yes to enable the feature of Cures, Refunds, and Repurchases.

Type of Cure: Full, or Partial (for example, Interest Only)

Days contract must be past due for requesting cure: (enter number of days)

Is Shortfund allowed? Yes or No. (See the contract Negotiated Amount.)

Collections Refund T&C:

Days the account must be in current status before refund [from lessor to vendor] required: (enter number of days)

Collections Repurchase T&Cs:

Days past due before repurchase can be requested: (enter number of days)

Number of cures before repurchase can be requested: (enter number of cures)

Termination Quote Type for Repurchase:

— Termination - Recourse With Purchase OR

— Termination - Recourse Without Purchase

On The Contract, Details: Negotiated Amount

The Negotiated Amount to settle the matter can be less than the cure amount due if shortfund is allowed in the contract's vendor program agreement Terms and Conditions.

Define Vendor Program Terms and Conditions

Most of the details of cures, repurchases, and refunds are defined in the attribute values of the terms and conditions of a vendor program agreement. The Terms and Conditions Set for defining cure, repurchase, and refund details is named Collections Cure and Repurchase. The particular terms and attribute values that you must define on vendor program agreements are described in the following table.

Vendor Program Terms and Conditions Set: Collections Cure, Refund, and Repurchase
Terms Attributes
Collections Cure Is cure applicable? Set this to YES if you want to enable the cure, refund, or repurchase functionality.
Collections Cure Type of cure: Full Cure or Interest Cure
Collections Cure Number of Days contract must be past due before lessor requests cure from vendor
Collections Cure Is shortfund allowed? Is the vendor allowed to pay less than the negotiated amount?
Collections Refund Number of Days contract must be in current (active, booked) status before refund (to vendor) required by lessee
Collections Repurchase Days past due before lessor can request the vendor to repurchase the contract
Collections Repurchase Number of cures vendor agrees to pay before lessor can request vendor to repurchase the contract
Collections Repurchase Termination Quote Type for Repurchase — Recourse: With Repurchase, or Without Repurchase?

To allow a vendor to perform cures, repurchases, and refunds, you must:

Within the Collections Cure and Repurchase terms and conditions set, select the terms and attribute values that satisfy your requirements. You must choose Yes for the Collections Cure attribute: Is cure applicable? because this value enables the cure, repurchase, and refund features.

Cure and Refund Attribute Details

The tables in this section describe the details of the attributes for each of the following terms:

The next sections describe using the Cure, Refund, and Repurchase features after they have been set up.

Requesting a Cure or Repurchase

Requesting a cure or repurchase consists of the following procedures:

  1. Identify Potential Cures.

    Run the concurrent program Generate Cure Amount to identify potential cures.

  2. Create a Cure or Repurchase Request.

    A cure or repurchase request may be for one or more contracts. For each contract, decide whether you are requesting a cure, a repurchase, or both.

    Create a cure or repurchase request by entering information on Vendor Cure Request pages.

    There is a status associated with the request, which changes as follows:

  3. Sending Cure Requests to Vendors.

    Sending the request is optional. Run the concurrent program Send Cure Request to send email messages to the vendor or vendors.

Identify Potential Cures

This program examines all contracts, which have vendor programs, where the contract payments are overdue, and which fulfill the Cure and Repurchase terms and conditions for cure determination. Submit a request to run the concurrent program Generate Cure Amount.

Create a Cure or Repurchase Request

Perform the following steps:

  1. Create a Cure Request.

    Select Vendor Name, Vendor Location, Vendor Contact, Currency, Request Number

    Search by Contract Number

    Result: Status = Pending Approval

  2. Use an approval workflow to get the cure request approved.

  3. Complete the Cure Request: Create, Update, and Submit Cure Invoices.

    Result: Status = Approved

The process of creating a cure or repurchase request, together with the contracts that must be cured or repurchased, consists of the following operations:

Prerequisites

You must have first run a concurrent program, Generate Cure Amount, to identify potential cures.

Steps

On the Create Cure Request page, select or enter the following fields, then click Create.

Adding Contracts to the Request

Perform the following steps:

Note: If you are adding contracts to the cure request in a different session to the one in which you created the cure request, you must first search for the cure request in the Cure Requests page.

Then click on the cure request hyperlink in the Results area.

The Cure Request Details page appears.

Click the Add Contract button.

The Cure Request - Add Contracts page appears.

  1. On the Cure Request - Add Contracts page, search for contracts according to the following fields:

  2. In the Results area, select the Select check box of each of the contracts that you want to add to the request.

  3. Click the Add to Request button.

    When you add a contract to the cure request, the next page that appears is the Cure Request - Details page, that enables you to perform a variety of tasks, as designated by the buttons:

Updating and Submitting the Request

Perform the following steps:

Note: If you are updating or submitting the cure request in a subsequent session, you must first search for the cure request in the Cure Requests page. Then click the cure request hyperlink in the Results area. The Cure Request Details page appears.

  1. On the Cure Request - Details page, for each contract in the list, you can perform a variety of tasks before you terminate your work on the page.

  2. If you have entered all the information necessary to process the request, click Submit.

Sending Cure Requests to Vendors

You may send an individual approved request to a vendor, or all approved requests for a vendor, or all approved requests to all vendors. This is not mandatory.

Prerequisites

You must have requests that have been approved to be sent to the vendor.

Steps

Perform the following steps:

  1. On the Submit Request page, select Send Cure Request.

  2. Enter or select values for the following parameters:

  3. Click OK, then Submit.

Process Acceptance

After a vendor replies by accepting the cure or repurchase request, Lease and Finance Management processes the acceptance by creating invoices to the vendor for the cure amounts.

Prerequisites

Requests must have status Approved, Sent to Vendor, or Acceptance In Progress.

Steps

Perform the following steps:

  1. On the Cure Requests page, search for the requests by entering a combination of search criteria in the following fields, and then click Go.

  2. In the Results area, click the Process Acceptance Details icon.

    The Process Acceptance Details page appears.

    Select or enter values in the appropriate columns. For example, in the Process column, choose the request type to process. In the Negotiated Amount column, enter the payment amount allocated for the contract. Click Update or Submit.

    Note: The negotiated amount for a contract is usually the amount past due. When payment from the vendor is received, Oracle Lease and Finance Management determines if the payment is less than negotiated—a shortfund. If it is a shortfund, the vendor program terms and conditions are checked to determine whether shortfunds are allowed.

  3. Run Billing concurrent programs:

  4. Make the contract non-delinquent by applying cash against all the outstanding contract amount

    Cure Invoice amount = Negotiated Amount

  5. Navigate to Create Manual Receipt page. Search by Contract Number and pay out the whole amount. Run the following concurrent programs:

Create a Cure Refund for a Vendor

When a lessee makes payments on a contract after the vendor has made cure payments, you can either directly refund the vendor's original cure payments, or indirectly refund the vendor by offsetting the received payment against other contracts that require cure payments by the same vendor.

Vendors > Cure Refund > Create Cure Refund

  1. On the Create Refund page, enter or select values and click Create.

    In the Summary Results table click Details. You can offset the refund amount by selecting an offset contract in the list of values. Click Submit.

    In the Refund Summary Results table, status = Pending Approval.

  2. Complete the Cure Refund by searching for it:

    Vendors > Cure Refund > Search for the Cure Refund Number

    Result = status Approved

Prerequisites

You must have first run a concurrent program, Generate Cure Refund, to identify contracts that can be refunded.

Steps

From the Cure Refund page, which displays vendor summary information in the header, you can perform the following operations:

Create a New Refund for the Vendor

  1. On the Cure Refund page, click Create Refund.

    The Create Refund page appears. Select or enter:

  2. Operating unit

    Note: The list of values includes operating units assigned to the MO: Security profile.

    Note: The application displays the selected operating unit as the default in the subsequent pages irrespective of the value that you set for the MO: Default Operating Unit profile option.

    The selected operating unit restricts the valid list of values in applicable fields.

  3. Currency for the refund

  4. Refund Type (optional)

  5. Contract Number, if you want to select an individual contract

    The only contracts you can choose are contracts due for a refund.

  6. Refund number (any format)

  7. Refund Due Date

    Refund Amount Due (display-only)

  8. Disbursement Amount (amount to refund to the vendor) Must not be more than the Refund Amount Due.

    Two fields display the outstanding cure amounts due from the vendor, and for the vendor site.

  9. payment terms for the refund

  10. payment method for the refund

  11. description (optional)

  12. Click Create.

    A refund is created with a status of Entered.

Query or Update Refunds for the Vendor

  1. Enter selection criteria for one or more of the following fields, then click Go:

  2. You can only update refund details if the refund status is Entered. Click the refund number hyperlink.

  3. In the Update Refund page, edit the fields, then click Update.

To Approve a Refund

In the Cure Refund page, in the Results area, click Submit for the refund you want to approve. This creates a transaction to generate the disbursement to the vendor in Oracle Payables.