Accounts Payable Integration

Business architecture

Companies use the accounts payable system in the ERP to determine how and when to properly allocate cash disbursements and to process payments. LeaseAccelerator does not duplicate your ERP AP system. It maintains all the necessary information regarding lease agreements, assets, payment terms and schedules, accounting standards and information about client sets of books and ledger segments to calculate the timing and amounts of due payments to lessors (funders).

Synchronizing LeaseAccelerator with the accounts payable system ensures that the accounts payable team is armed with the necessary details required to approve, dispute, and disburse payments to lessors. LeaseAccelerator is not a billing / invoicing system. It is not intended to generate or maintain invoices, credit notes, payment instructions, discounts, payment terms, supplier bank accounts, etc.

However, clients may elect to use the due payments to generate invoices and post them into their ERP accounts payable module and to process the payments accordingly. Clients must set the necessary procedures and controls to review, examine and verify the generated due payments before and after converting them into invoices and should apply the client’s standard invoice approval / payment policies and procedures. In such a case, the client does not expect to receive invoices from lessors.

LeaseAccelerator AP integration also includes the roundtrip of importing actual disbursements (paid through the ERP AP module) and matching them to the corresponding due payments.

This step is important to balance the AP clearing account in LeaseAccelerator.

Download a PDF version of the Enterprise Integration User Guide.

Due Payments

LeaseAccelerator can generate due payments:

• On a monthly or weekly basis

• For a specific ledger (set of books)

• In schedule transactional currency (not converted to ledger currency if different)

• At the lease (schedule or deal) level or at portfolio level

• Optionally filtered by selecting any combination of available parameters (segments, tags, currency, schedule, lessee, country, entity, asset type, business unit)

• Optionally excluding evergreen assets

• Optionally excluding payments that have not been transferred before to the ERP

• Optionally excluding entries transferred and paid

LeaseAccelerator has its own accounting engine. Accordingly, it automatically generates all expense and balance sheet recognition entries. These entries are posted to LeaseAccelerator’s subledger clearing account.

Actual disbursements:

Actual disbursements are processed through the ERP Accounts Payable module and posted to the accounts payable clearing account on the ERP general ledger.

LeaseAccelerator receives updates from the ERP’s accounts payable to capture the actual disbursements made for each lease. The updates can be sent at any frequency.

Actual disbursements may vary in amount and date paid from due payments calculated by LeaseAccelerator for a variety of reasons. Variances can result from either:

• One-time / variable change, such as late payment fee, over-usage of equipment, etc. which will not affect successive payments.

• Permanent change, which could result in any change in terms due to renegotiated contracts or changes in leased assets status (buyout, terminated, etc.) or any other conditions remain effective for future payments. Clients must resolve these discrepancies by updating LeaseAccelerator terms to keep LeaseAccelerator synchronized and aware of correct payments.

• Late payments or prepayments where the client skipped a payment in a previous month so the actual disbursement for that month was zero and the following month it is doubled. Or simply if – for any reason – the client decides to pay in advance.

The resulting net balance in the LeaseAccelerator subledger clearing account represents a timing or amount difference between the due payment and the actual disbursement. Clients have two options for handling this net balance: roll this account into the desired line item for financial statement presentation or record a general ledger entry to transfer the net balance in the clearing account to either prepaid or actual as needed, which would not be performed in the subledger.

Upon receiving the actual disbursements, LeaseAccelerator can match each of them to the corresponding due payment either by:

• LedgerEntryLineId: LeaseAccelerator generates a unique reference key identifier for every due payment line. This key is called “LedgerEntryLineId” which cannot be repeated across the lifetime of the client database. Clients who decide to import LeaseAccelerator’s due payments and turn them into AP invoices in their ERP should keep track of this key and send it back along with the corresponding actual disbursement(s) so that LeaseAccelerator can match the actual disbursements to the corresponding due payments. Credit notes can be sent back to LeaseAccelerator with negative amounts.

• Other key identifiers: Clients who decide to process lease payments based on lessors’ invoices or other sources of payments or recurring payment generator will not be able to import the unique key identifier generated by LeaseAccelerator. In such case upon receiving the actual disbursements, LeaseAccelerator will try to match the actual disbursements to their due payments based on a combination of keys:

  • Currency

  • Due date (month and year)

  • Purchase Order Number

  • If duplicate records were found, LeaseAccelerator will try to match based on Lessor Reference Id

If you are planning to use this method, make sure PO numbers and Lessor Reference Id’s are correctly populated in both LeaseAccelerator and your ERP system.

The specific integration model for the LeaseAccelerator accounts payable is determined by which business requirements are applicable from the following considerations:

• LeaseAccelerator due payments only

• Lessor invoices only

• Lessor invoices as payments

Due Payments Only Model

In this model, LeaseAccelerator generates due payments information based on the contractual terms of the lease. LeaseAccelerator is not a billing / invoicing system. It is not intended to generate or maintain invoices, credit notes, payment instructions, discounts, payment terms, supplier bank accounts, etc.

However, clients may elect to use the due payments to generate invoices and post them into their ERP accounts payable module and to process the payments accordingly. The client does not expect to receive invoices from lessors.

Actual payments need to be transferred back to LeaseAccelerator to adjust the clearing account in LeaseAccelerator.

Disclaimer:

Clients who elect to use LeaseAccelerator generated due payments to generate invoices will do this process at their own discretion and under their full responsibility without any liability toward LeaseAccelerator. Clients must set the necessary procedures and controls to review, examine and verify the generated due payments before and after converting them into invoices and should apply the client’s standard invoice approval / payment policies and procedures.

P100: Start

As part of monthly or weekly accounting activity, due payments to lessors (funders) need to be transferred from the LeaseAccelerator subledger to accounts payable in the ERP as invoices.

P200: Generate and send due payments

Depending on the integration method selected, AP-C1 should be activated on a weekly or monthly basis to generate and transfer due payments:

Each entry has a unique payment identifier (LedgerEntryLineId) so that LeaseAccelerator can track the entry and match actual payments to due payments based on that identifier.

LeaseAccelerator stores the transmitted due payments with LedgerEntryLineId, time/date of request, request parameters, and user requesting the transfer.

P300: Receive due payments (AP-C1)

P400: Valid?

The accounts payable user reviews and approves the due payments imported from LeaseAccelerator. The user must account for any of the following cases:

• One-time additional fees or deductions due to events pertaining to this particular period

• A re-negotiated term affecting the payments for this and recurring periods

• An event that was not recorded in LeaseAccelerator (on asset, schedule, or portfolio levels)

If due payments are valid proceed to step P600, otherwise proceed to step P500.

P500: Apply corrections

The accounts payable accountant informs the assigned LeaseAccelerator user who corrects the data entered in LeaseAccelerator and regenerates the Due Payments as per the method selected:

P600: Generate invoices

The integration officer runs a program to convert due payments into invoices and posts the invoices into the ERP AP module. Generated invoices should be processed as per normal payable approval and payment process.

Due payments key identifier (LedgerEntryLineId) must be maintained in the invoices. 

Generated invoices must carry a flag that identifies them as lease invoices.

P700: Process payments

The accounts payable officers process the payment according to the client’s policies and procedures.

Payments must carry the key identifier (LedgerEntryLineId). A single invoice may be paid by one or more payments.

P800: Send disbursements to LeaseAccelerator (AP-C2)

As a trigger or as a nightly process, the ERP recognizes posting of lease payments to accounts payable.

The ERP generates a file with actual disbursements (corresponding to lease invoices only) containing the information that must be sent to LeaseAccelerator including the key identifier (LedgerEntryLineId).

P1000: Match Actual payments to due payments

LeaseAccelerator applies the actual payments to the unpaid due payments according to the keys supplied (LedgerEntryLineId) within the actual disbursements file. Refer to the “LeaseAccelerator Application of Actual Payments to Due Payments” section below for a detailed explanation.

Additional use cases