How the System Handles Payments
When you receive a customer's Buy-Here/Pay-Here loan payment, the system applies it using the 'true-daily-earnings' method. Interest is accrued on a daily basis much like any other vehicle loan. The system will apply the payment to cover any unpaid interest first, current interest next, and then principal.
If the customer has not paid enough money to cover the amount necessary to become current on the loan, the system will show the customer as being late on their payments.
Accepting a Payment into the System
To receive a customer's loan payment, first click to select and highlight a customer's name in the Buy Here/Pay Here screen.
Once the customer has been selected, click on the 'Receive Payment' command located on the left side of the screen.
You may also receive payments for a selected customer by clicking on the 'Dealer Financing' drop down menu located at the top of the screen and selecting the 'Make Payment' option.
The system will display the Customer Payment window which displays:
➢Customer Name.
➢The next outstanding payment amount and its due date.
➢The amount the customer needs to pay to become current on Buy Here/Pay Here loan payments.*
➢The current loan principle and interest due.**
➢Unpaid late fees.
➢The current payoff total.
➢Other pertinent loan information.
*Note: The amount a customer needs to pay to become current on the loan includes the currently due payment. Therefore, if a customer is current and never misses a payment, the system will still show that this customer needs to make a payment to become current. For example, John Smith pays $100.00 due on the first day of each month. He is current on all payments. On the first of this month, he makes his payment, and you enter the payment into the system. On the second day of this month, John Smith is technically due to pay another payment of $100.00 to become current even though this payment is due on the first day of the following month. The reason for this is that the payment is still due even though he has not passed the due date of his payment. In other words, a due date is not when the payment is actually due -- a due date is the last day a payment will be accepted before a late charge is assessed.
**Note: Interest is calculated on a daily basis so the correct payment dates are very important.
Making Entries and Updating the Record
Enter the customer payment date in the Payment Date box. Be sure you enter the correct date the payment was received.**
The system automatically fills in the Payment Date field with today's date. You may override this if you wish. When entering dates, you have the option of using the calendar function. Click the calendar button to display the calendar, then move through different months and click on a specific date. Clicking on a date will automatically enter that date into the date field. You may also add or subtract days to a date that has already been entered by pressing the + or - keys.
Enter the payment amount in the Payment Amount box.
Enter the payment method in the Payment Method box. Click the down arrow to display a pull-down menu of payment method choices. To apply a payment but not count the money received in any of the system's profit reports, select Misc Credit.
Enter the name of the person receiving this payment. You may use the drop-down box to select a name from a list. This list comes from the names of the salespersons entered into the Staff Maintenance window.
You may enter late fees charged and paid into this window. If you have previously checked the box labeled 'Prefill', the system will calculate the appropriate late fee to charge using information you entered into the deal and set up when entering your Buy-Here/Pay-Here finance source in the Bank Maintenance window.
If appropriate, you may also enter a total for any miscellaneous fees you have decided to charge the customer as well as a description of these fees.
Once all information has been entered, click on the Apply Payment button. This will apply the payment to the customer's account and recalculate current balances. The program will also display a preview screen containing a customer payment receipt which you have the option of printing. (See example shown below)
Note: Once a payment has been applied, a unique transaction receipt number will be assigned to this payment. This allows you to track payments received and payments missing (if someone at your dealership were to purposely delete a loan payment from a customer's account). Printing the Receipt Report and sorting by receipt number is a convenient way to look for missing payments.
