This chapter covers the following topics:
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:
A lessee fails to make any payments to the lessor within a specified period of time, OR
The vendor has paid the lessor a specified number of cure payments on behalf of the lessee for the delinquent contract, AND
The lessor requests that the vendor repurchase the contract asset(s), and the vendor accepts to repurchase (buy it back).
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:
Define Accounting Templates specific for Cures, Repurchases, and Refunds; AND
Define the Vendor as a Party for Billing.
On Vendor Program Agreements: Terms and Conditions (T&Cs) Sets.
Define Collections Cure and Repurchase Terms and Conditions (T&Cs) Set for cures, repurchases, and refunds); AND
Define two T&Cs for Termination Quote values for the Vendor: Early Termination of Contract, and End of Contract Term.
On Contracts:
Specify the Negotiated Amount; AND
Specify offset contracts, if applicable.
Perform the following steps:
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.
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 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 |
Perform the following steps:
Define two Terms and Conditions for Termination Quotes calculations:
Early Termination of Contract, and End of Contract Term
Define Terms and Conditions (T&Cs) Sets for Collections. Set up the terms for each:
Collections Cure
Collections Refund
Collections Repurchase
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.)
Days the account must be in current status before refund [from lessor to vendor] required: (enter number of days)
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
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.
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.
| 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:
Specify the Collections Cure and Repurchase terms and conditions set on the vendor program agreement.
Define the terms and attribute values.
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.
The tables in this section describe the details of the attributes for each of the following terms:
Collections Cure
Collections Refund
Collections Repurchase
| Attribute | Description |
|---|---|
| Is cure applicable? | If Yes, allows cures, repurchases, and refunds |
| Type of cure | For all contracts not in litigation, specifies whether the cure is to be Full (that is, cure the rents outstanding), or Interest (that is, cure only the interest on the amount outstanding) |
| Days contract must be past due for requesting cure | Number of days beyond the due date before the lessor is entitled to request a cure payment |
| Shortfund allowed? | Does the lessor allow the vendor to pay less than the negotiated amount? |
| Attribute | Description |
|---|---|
| Days contract must be in current status (active, booked) before refund required | Number of days after a period of delinquency. Because the contract might become delinquent again, the lessor may wait for this number of days before refunding the vendor. |
| Attribute | Description |
|---|---|
| Days contract must be past due for before requesting repurchase | Number of days the contract must be past due before the lessor may request the vendor to repurchase the contract |
| Number of cures before lessor can request repurchase | Number of cures the vendor must pay before the lessor may request the vendor to repurchase the contract |
| Termination Quote Type | Recourse: With Repurchase, or Without Repurchase |
The next sections describe using the Cure, Refund, and Repurchase features after they have been set up.
Requesting a cure or repurchase consists of the following procedures:
Run the concurrent program Generate Cure Amount to identify potential cures.
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:
While you are creating the request, and are still adding contracts to the request, but have not yet submitted the request, the status is In Progress.
After you have submitted the request, the status is set to Pending Approval.
At this stage, an internal workflow is triggered, which requests approval; after this approval is given, the status changes to Approved.
Finally, when you send the request, the status changes to Sent to Vendor. See Sending Cure Requests to Vendors.
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.
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 Request.
Select Vendor Name, Vendor Location, Vendor Contact, Currency, Request Number
Search by Contract Number
Result: Status = Pending Approval
Use an approval workflow to get the cure request approved.
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:
Create the request
Add one or more contracts to the request
Note: When you create the request, you can immediately add contracts to the request, or you can add them later.
You must have first run a concurrent program, Generate Cure Amount, to identify potential cures.
On the Create Cure Request page, select or enter the following fields, then click Create.
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.
Vendor Name
Vendor Location
Vendor Contact
Currency
Request Number (may contain any alphanumeric characters, in any format)
Request Type: Cure, Cure and Repurchase, Repurchase
Click Create.
At this point, a request has been created, with your specified request number, whose status is In Progress.
When you create the cure request, the next page that appears is the Cure Request - Add Contracts page.
If you want to add contracts to the request, continue at the next section, Adding Contracts to the Cure 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.
On the Cure Request - Add Contracts page, search for contracts according to the following fields:
Contract Number
Customer Name
Program Agreement
In the Results area, select the Select check box of each of the contracts that you want to add to the request.
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:
Add Contract
Update
Submit
If you want to add more contracts to the cure request, click Add Contract and repeat the preceding steps.
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.
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.
Select the Remove check box, if you want to remove the contract from the list.
If you want to save the changes have made so far, but do not yet want to submit the request, click Update. After you click Update, the status of the request is still In Progress and you can continue to make changes to the request.
If you have entered all the information necessary to process the request, click Submit.
The status of the request changes to Pending Approval.
A workflow is called so that the request can be approved. This workflow requires Oracle Workflow to have been set up previously. See the Oracle Lease and Finance Management Implementation Guide.
If the request is approved, the status changes to Approved, and you cannot change any request details.
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.
You must have requests that have been approved to be sent to the vendor.
Perform the following steps:
On the Submit Request page, select Send Cure Request.
Enter or select values for the following parameters:
Vendor Number
Report Number
Report Date
Click OK, then Submit.
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.
Requests must have status Approved, Sent to Vendor, or Acceptance In Progress.
Perform the following steps:
On the Cure Requests page, search for the requests by entering a combination of search criteria in the following fields, and then click Go.
Vendor Name
Reference Number
Request Type
Approval Status. Select one of the following: All (the default), Approved, Pending Approval, Sent to Vendor, or In Progress.
Request Dates From and To
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.
If shortfunds are not allowed, then any difference between the cure amount and the negotiated amount will be added to future cure requests.
If shortfunds are allowed, then the negotiated amount represents the final negotiation on the contract for that period, and does not add to future reports.
Run Billing concurrent programs:
Process Billable Streams
Prepare Receivables Bills
Receivables Bills Consolidation
Receivables Invoice Transfer to AR (Oracle Receivables)
AutoInvoice (Oracle Receivables Manager responsibility)
Fetch AR Invoice Numbers (Oracle Receivables)
Make the contract non-delinquent by applying cash against all the outstanding contract amount
Cure Invoice amount = Negotiated Amount
Navigate to Create Manual Receipt page. Search by Contract Number and pay out the whole amount. Run the following concurrent programs:
Generate Cure Amount
Generate Cure Refund
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
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.
Complete the Cure Refund by searching for it:
Vendors > Cure Refund > Search for the Cure Refund Number
Result = status Approved
You must have first run a concurrent program, Generate Cure Refund, to identify contracts that can be refunded.
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
Query or update refunds for the vendor
Approve a refund
On the Cure Refund page, click Create Refund.
The Create Refund page appears. Select or enter:
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.
Currency for the refund
Refund Type (optional)
Include All Sites - include all contracts due for a refund, across all vendor sites, in the request
Vendor Site - include only contracts specific to a site that are due for a refund, in the request.
Both values also show the refund amount due, the outstanding cure amounts due for the vendor, and the outstanding cure amounts due for the vendor site.
Contract Number, if you want to select an individual contract
The only contracts you can choose are contracts due for a refund.
Refund number (any format)
Refund Due Date
Refund Amount Due (display-only)
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.
payment terms for the refund
payment method for the refund
description (optional)
Click Create.
A refund is created with a status of Entered.
Enter selection criteria for one or more of the following fields, then click Go:
Refund Number
Refund Due Date From
Refund Due Date To
The Results area displays a list of the following, associated with each refund:
Refund Number
Refund Due Date
Currency
Refund Amount
Disbursement Amount
Payment Terms
Payment Method
Status
You can only update refund details if the refund status is Entered. Click the refund number hyperlink.
In the Update Refund page, edit the fields, then click Update.
Refund Due Date
Payment Terms
Payment Method
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.