Lien Payout Clearing Overview
This article covers Step 4L of Understanding Accounting Integration: the Lien Payout Clearing control account. For the full series, see Accounting Integration Setup: All Steps.
What Is a Lien Payout?
A lien payout is the amount payable to a finance company to give the dealership a clear title to a unit that has been traded in. The Lien Payout Clearing account is a General Ledger (GL) account used as a clearing account for these transactions. It is typically set up as a Current Liability account. At any point in time, the balance of this account shows how much the dealership owes in outstanding lien payouts.
How the Lien Payout Clearing Account Works
When a Customer Order unit deal includes a lien payout on a trade-in and the deal is finalized, Blackpurl credits the lien payout amount to the Lien Payout Clearing GL account. The dealership remains responsible for paying out the lien to the finance company.
After the deal is finalized, the Lien Payout Clearing account carries a credit balance representing the outstanding lien obligation.
Paying Out the Lien
When the dealership is ready to pay out the lien, there are two options. Both produce the same result: the lien is paid and a clearing entry is made against the Lien Payout Clearing GL account.
Option 1 — Create a Vendor Invoice
Manually create a Vendor Invoice for the relevant finance company for the lien amount to be paid out, and allocate the line item to the Lien Payout Clearing GL account.
Pay the lien by attaching the payment to this Vendor Invoice.
Option 2 — Pay Directly from Your Bank
Pay the relevant finance company directly from your bank account and allocate the payment directly to the Lien Payout Clearing GL account.
Clearing the Account
Once the lien payment is recorded using either option, the Lien Payout Clearing GL account is cleared for that transaction. The balance on the account returns to zero for that lien, confirming the obligation has been met.
