The Usage based leasing option extends OFSLL support of lease functionality and facilitates to charge the asset usage fee for the customer not at the time of the Termination/Payoff Quote but based on the actual usage as per the defined Cycle (i.e. Daily, Weekly, Monthly and so on). Also for usage based lease contracts, customer has option to pay the minimum monthly lease payment and the usage fee based on the actual usage.
Whenever customer sends asset usage details to OFSLL, the details are categorized to applicable rate slabs, for tiered and not-tiered types and based on usage methods (i.e. rollover/advance) and charge matrix, the usage fee is calculated and charged on to the account. The same is communicated to the customer through account statement.
In such type of billing, customers would benefit by being charged only when they use a product or service, rather than having to buy something outright.
Consider the following example of a company which leases a photocopying machine. The monthly billing amount consists of two components - a flat rate (rental) that covers the fixed costs and a fee for usage charge (such as 1 cent per copy). Here, Usage is billed based on total number of units utilized from last bill to current billing date and customer pays the following two components:
Consider the below image which indicates the complete usage based leasing workflow supported in the system. A brief detailing of the same is provided below.
Following image indicates four types of asset usage lapse / rollover combinations supported:
As per the above usage methods, usage units billing is accounted as indicated below:
Note
The usage lapse / rollover is subject to maximum usage as defined for a Collateral.
The Rollover / Advance is accounted for fixed reset period. For example, if Contract starts at Jan and rollover is set to 3 months for a monthly usage billing cycle, the rollover resets at end of 3rd month and from April new rollover set starts.
Consider the following type of charge matrix defined:
Rate Chart |
From Units |
To Units |
Base |
0 |
1 |
Base |
30 |
2 |
Base |
75 |
3 |
Cycle Excess |
0 |
4 |
Cycle Excess |
50 |
5 |
Life Excess |
0 |
6 |
Life Excess |
50 |
7 |
On receiving the following type of usage data from customer, the chargeable units are derived based on lapse and rollover rules. The chargeable units are charged based on Tiered and Non Tiered preference indicated for a collateral. The sample usage calculation is as indicated below:
Base Units:76, Cycle Excess:51, and Life Excess=65
Base Charge = (29*1)+(45*2)+(2*3) = 125
Cycle Excess Charge=(49*4)+(2*5)=206
Life Excess Charge=(49*6)+(16*7)=406
Total Charge=125+206+406=737
Base Charge =(76*3) = 228
Cycle Excess Charge=(51*5)=255
Life Excess Charge=(65*7)=455
Total Charge=228+255+455=938
Following two batch jobs are provided for usage based leasing:
Batch job set - SET-IFP (INPUT FILE PROCESSING)
Batch job - IUHPRC_BJ_100_01 (ASSET USAGE HISTORY FILE UPLOAD)
This process uploads asset usage details into the system. To do so, place the usage details file in ‘iuh’ folder available under input > ifp > iuh directory and run the batch job.
Batch job set - SET-TPE (Transaction Processing Engine)
Batch job - TXNUSG_BJ_100_01 (Usage Charge Processing)
This process is used to derive the billing amount to be charged for Lease Usage/Rental based asset for consumed units which is calculated by the applicable charge matrix and posts lease usage/rental fees on account.
The Statements tab in Customer Service > Account Details tab displays the ‘Fee Usage Charge(+)’ that is posted to lease usage account. On generating a report of lease account, the Fee Usage Charges are indicated as separate line item.
The Elastic Usage Term in OFSLL refers to a system predicted value to indicate customer about the remaining term to reach the asset usage life as per current usage pattern. The Elastic Usage Term is available in Collateral > Usage Summary tab and is calculated by the following methods: