Introduction to Fleet Finance
Fleet Finance is a specialised asset finance solution designed to acquire and manage fleets of vehicles or equipment through flexible leasing plans. It is designed to meet the specific needs of organisations that rely on fleet assets, such as transportation firms, logistics providers, utilities, and construction firms. Fleet Finance solution is built on robust AA Facility framework and provides comprehensive functionality to manage the entire lifecycle of fleet financing.
Fleet Finance focuses exclusively on fleet-based assets, providing a facility that consolidates and manages the financial aspects of leasing and payment schedules. Fleet Finance operates at the facility level, where multiple individual leased asset agreements are grouped under a master agreement. This centralised approach helps businesses to have greater financial control over their fleet or equipment.
The master asset finance agreement can be booked in the Facility Product Line and the sub asset finance agreements can be booked under the Asset Finance Product Line.
The feature supports,
- Revolving and non-revolving type facility master agreements.
- Flexible Commitment schedule for availing the commitments.
- Combined payment schedule projections for all asset finance sub agreements under the master agreement.
- Consolidated bills, combined payoff, and combined statements for all asset finance sub agreements under the master agreement, and so on.
Product Configuration
The below section describes the Fleet Finance Facility product configuration.
Property Classes
The Facility product line provides high-level definitions of business components (property classes) required to deliver fleet finance functionality. The product line is system-delivered and cannot be modified by the user.
The financial institution uses the business components to build individual and specific products based on the customer target segment requirements. The applicable property classes of the Fleet Finance products are:
- Account
- Accounting
- Activity API
- Activity Charges
- Activity Mapping
- Activity Presentation
- Activity Restriction
- Charge
- Closure
- Constraint
- Customer
- Evidence
- Interest
- Limit
- Officers
- Payment Priority
- Payment Rules
- Payment Schedule
- Payoff
- Settlement
- Statement
- Sub Arrangement Condition
- Sub Arrangement Rules
- Tax
- Term Amount
Product Builder
Read AA Product Builder for more information on product construction and configuration process.
Illustrating Model Parameters
Product Conditions of a Property Class are evaluated to bring out the features of the Property Class. The values in the Product Condition are made default in an arrangement during its creation. The negotiability or default values and other restrictions are also defined in the Product Condition. These Product Conditions with the Properties derived from the Property Classes are grouped together to build products.
Product Conditions are dated and some of them have currency as part of their ID. When currency forms part of the Product Condition ID, then the user has to create different conditions for each currency in which the product is available. When a new condition is created or an existing condition is amended, then the user must proof and publish the product to which the condition is linked.
Model Parameters consists of the product conditions of the Property Classes listed below:
Account
This property class is used to specify the account related information like description, title and so on. It is also used to create and maintain the lease account.
Accounting
This property class is used by all products. It defines the accounting rules for the leasing product and controls the link between the accounting events generated by the property actions and the accounting allocation rules to be applied to these events.
Activity API
This property class allows the users to extend the core processing of arrangement activities by adding user-defined routines.
Activity Charge
The Activity Charge Property Class defines the charges that has to be applied when a particular activity is triggered on the arrangement. The charges applied can be made due, capitalised or deferred.
Activity Mapping
The Activity Mapping Property Class provides a link between financial transactions initiated from payment system and the relevant activity that has to be processed against the agreement.
Activity Presentation
The Activity Presentation is an optional Property Class that allows to define versions used for various Properties during arrangement activities. The versions can be defined at Property Class, Property and Activity levels.
Activity Restriction
The Activity Restriction property class is used to specify the restriction on a particular transaction. The restriction rules including the relevant periodic attributes and activities are defined in the product condition. These rules are then used to define activity-based or property-based restrictions. A rule if broken can be set to result in an override or error. The user can attach a charge to this property class and set to be made due, capitalised or deferred.
Charge
The Charge property class is used for all charge calculations. The primary purpose of this property class is to enable calculation of charge. The charge defined can be scheduled charge, periodic charge or an activity-based charge. Charge can be fixed or calculated based on Band or Level. The currency in which the charge has to be applied can also be defined. It is possible to define a minimum charge and also waive the charge.
Closure
The Closure Property Class defines the rules and behaviour for processing closure of an agreement.
Constraint
The Constraint property class is used to define constraints on the agreements. For example, constraint defines the maximum period an arrangement / a transaction that can be backdated in the product and the result as error or override message.
Customer
This property class is used by all products. This property class is used to define all the parties involved in the master agreement. The customer is always defined at the agreement level. Each agreement can have one or more legal owners defined in owner(s), or guarantor of the facility.
Evidence
This property class is used to collect the mandatory documents required to manage the master/fleet finance agreement.
Limit
The Limit Property Class primarily controls the use of Limit module by the product. The user can set up single or shared limit and can define Limit Reference applicable for a specific product such that the same is set as default in an arrangement. For a new limit, at the agreement level, the user should provide New in the Limit Serial field. Further limits can be set to use the Limit module, or it can be managed only within the arrangement architecture framework.
Officers
This property class allows the user to specify account officer or the relationship manager for the borrower’s master agreement.
Payment Priority
This property class is used to define the order in which the combined repayment is allocated in the dues of sub agreement upon receiving the combined payment at the master agreement level, the is allocated to individual sub agreements based on the rules defined in this Property Class.
Payment Rules
This property class controls the sequence and order in which the bills or outstanding balances that needs to be settled. An agreement can contain several outstanding bills, and each bill can comprise multiple amount (for example, principal, principal interest, penalty, tax, charges and so on). This property class is used to define the method by which a single payment is applied to multiple bills and multiple amount types.
Payment Schedule
The Payment Schedule Property Class is used by all products which have amounts billed (that is, made due or capitalised or pay). Payment Schedule has of one or more payment definitions with conditions such as, payment type and method, arrangement properties, dates, and amounts. The AA.PAYMENT.TYPE application is used to define the standard payment types such as Combine Bill and Combined interest, and so on. This payment type is then attached to each payment schedule definition. The start and end date can be specified. The user can specify the repayment of agreement to commence after ‘n’ months from the arrangement date or ‘n’ months before the maturity etc.
Payoff
The Payoff Property Class is used to define payoff conditions such as payoff expiry days, settlement activities and so on. Attaching the Payoff property class in the product allows the user to generate the payoff quotation/statement which comprises of the total cost with the breakdowns to settle the subject agreement.
Settlement
The Settlement Property Class is used to control the settlement related functions in the agreement. Settlement can be handled by linking any Temenos Transact account, the account and bank details of another bank by using Direct Debit and beneficiary of the customer. The Default Settlement Account / Default Settlement Beneficiary is considered as the default settlement option for both Pay-in (Transfer In) and Pay-out (Transfer Out) transactions if explicitly the Pay-in or Pay-out settlement account/beneficiary is not specified for a specific payment types.
Statement
The Statement Property class is used to define the legacy ACCT.STATEMENT feature in the agreements. Statements can be produced in the required frequency.
Sub Arrangement Condition
The Sub Arrangement Condition Property class is used to define the conditions or restrictions for processing or creating sub agreements. When a drawdown / sub agreement is created under a Facility, the system validates against the conditions and raises override or error message whenever any condition is breached.
Sub Arrangement Rules
The Sub-Arrangement Property Class allows the user to define the rules/values for the sub agreements of the subject master agreement. It is attached to the Facility product to control the allowed customers, currencies, and products of the sub agreements under the master agreement.
Tax
The Tax Property Class primarily controls the taxes applicable for the agreement. Taxes can be calculated for Interest, Charges, Periodic charges, Account property amount (that is made-due or paid), and activities
Term Amount
This property class is used by financial products which involve the term and the commitment amount of the agreement. This property class controls the commitment made by the bank and the customer.
Illustrating Model Products
The below model products are available in the model bank which helps the user to refer and create their own fleet finance products.
|
Product Line |
Product Group |
Product |
|---|---|---|
|
Facility |
Fleet Finance |
|
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