This article will take you through adding Deal Financing to a Customer Order > Unit Deal and also how to pay with financing
Prerequisite
Setting up your Finance Providers
Your Finance Providers will need to be set up so that they are available for selection
This needs to be only done once and then the Finance Providers will be available across all Customer Orders
This is the link to the relevant article that will show you how to set up your Finance Providers
- How to Setup Vendor Products and Services.
Finance Payment includes the Dealership's Commission
Dealerships also have the option to include the Commissions earned from the finance company as part of
the expected payment from the finance company to be processed in Blackpurl
System Settings > Settings & Controls - Shop Settings allows you to enable this feature
What does this mean?
- It means that when the finance company funds (pays) the full amount of the finance and commission to the Dealership, the full amount (finance + commission) will need to be receipted in Blackpurl against the relevant Customer Order
The Dealership will need to remember to record the amount of the Dealership Commission on the relevant field on the Deal Finance section
What if some of the Financiers don't pay for the Dealership Commission at the same time with the finance amount?
- If only some of the finance companies include their commissions in their payments while others pay it out separately, the Dealership can disabled the setting for the relevant Vendors by a new option in the Products & Services settings in a Vendor Record
Navigate to the relevant Vendor Record > Edit and review Commissions not included in finance payments
What does this mean?
- This would mean that the Dealership can still record the Dealership Commission amount in the relevant field on the Deal Finance and when the Customer Order is closed out, the Commission will still integrate to their Accounting (as per Control Account - Finance Commission Income BUT the offset will go to the other Finance Commission Clearing)
- Once the Dealership receives the separate Dealership Commission payment from the Financier they will allocate it to the Finance Commission Clearing GL in their accounting package - the commission does not get receipted against the relevant Customer Order
Accounting Integration
For our Dealerships that have Accounting Integration, there are two Control Accounts that have been added to the System Settings > Accounting Integration - Control Accounts
Finance Commission Income
To be able to record the income from Financing Commissions earned when the Customer Order is closed out and the Dealership has indicated Finance Commission in the relevant field on the Deal Finance over in the accounting package
For further information, please review our article - Step 4N - Understanding Accounting Integration - Control Accounts - Finance Commission Income
Finance Commission Clearing
This is a clearing account for financing commissions which is used when the commissions are not
included in the payment from the finance company for the Unit Deal
For further information, please review our article - Step 4O - Understanding Accounting Integration - Control Accounts - Finance Commission Clearing
How to Add Financing to a Unit Deal
We would recommend that you set up the Customer Order > Unit Deal - add the unit/options/pricing etc
Then from the Deal actions section > click
A new Deal Financing section will automatically generate and the user would need to select the relevant Finance Provider in the Deal Financing > Summary section
The user will then need to to review the fields that were automatically populated (with the information from the Unit Deal) and then complete any other relevant fields (as required)
In the F&I products section > add any F&I Products etc and then check all your figures
For further information, please review our article - Finance Products on a Unit Deal (Finance Insurance or Extended Warranties etc) on how to setup new F&I Products
In the Funding detail section, it will tell the user what funding is looking to be received ie Customer summary / Funding summary
There are additional actions to be found in the Financing actions section ie Submit financing / Add a Co-Buyer / Accept a downpayment
These Financing Actions will change and will be dependent on the status of the Deal Financing section ie Submitted status will generate the Record Funding Payment action and/or what is missing from the Deal Financing section ie Add Finance Company and/or other actions such as Add Co-Buyer / Accept down payment
Once you have submitted the Customer's application to the Finance Company, click 
This will change the Status of the Deal Financing to Submitted - 
In theory the finance figure that is shown on the Unit Deal / Deal Financing section should equal the amount asked for in the Finance Application that you submit on your Customer's behalf to the relevant Finance Company
Once the status is Submitted, there will be a new Financing action available - 
Click on 
once you have received the Approval from the Finance Company
Once the Deal Financing status is Approved then it will generate the action - 
The Document section will allow you to attach any relevant documentation
How to Receive the Down Payment Due from the Customer
The Down Payment will need to recorded in the correct field within the Deal Financing > Summary section
When the Customer pays the Down Payment, from Financing Action section, click 
The Add Deposit window will pop up for you to complete the Payment Method and then 
The payment of the Down Deposit will now show in the Deposit Section
Funding has been received from the Finance Company
Once the finance funding has been received, in the Financing Actio > click 
,
Please note that all Funding received from the Finance Company will need to be received into Blackpurl using the 
in the Deal Financing section
If the user tries to use the Deposit section and the Payment Method: Finance Company will be greyed out
Once the user has clicked 
the Deposit window will pop up and all the information will be generated (if you want to backdate the date, you can) > click
Checkout
Only when the Deal Financing section has the Status: Funded and the Unit Deal section has the Status: Approved will you be able to Checkout
If you try and checkout without the above statuses mentioned, the user will receive a notification message in checkout
Once you are ready to Checkout > click on 
and click
to take the finance funding from the Deposit section
If the Customer paid a down payment, you will need to click on the Unused Deposits again to take the down payment from the Deposit Section
Then just Finalise Invoice as normal
Accounting Integration Tips
- When these finance funds are received into the Dealership's bank account, in your accounting package you will need to allocate these funds to the General Ledger that is attached to the Payment Method - Financing
For example, in our test environment, the General Ledger that is attached to Undeposited Finance
is Undeposited funds General Ledger
Further information
Buy rate vs Sell rate
Users now have the ability to enter their buy rate commission alongside their sell rate
Dealerships can have a “Buy Rate Commission” with each financer provider that represents the minimum rate the
finance company will accept
The Dealership can mark up that rate by an agreed upon amount which is known as the “Sell Rate,”
and it is the rate that Blackpurl will use for calculating the customer's amount financed
In the deal financing summary, two interest rates will now be exposed with the "Buy Rate Commission" being optional
This "Buy Rate Commission" is calculated as the difference in total loan interest between the two rates
The Dealership can optionally override the calculated "Buy Rate Commission" and Blackpurl will only
recalculate this commission amount whenever the "Buy Rate Commission" is changed or the estimated
loan payment amount changes
This commission will be included in the profitability of the deal
Deal commissions on reports
Our unit deal-related reports can now report two types of commissions for each deal when the user
has the Deal commissions permission enabled
Sales commission - which is the commission paid to salespeople
Finance commissions - which are commissions earned by the Dealership for financing the deal
Dealership will be able to report these Commissions as optional columns on the following reports:
Active Unit Deals report
Invoice Summary report
Invoice Detail report
Example of the optional columns on the Active Unit Deals report:
Both of these commissions will also be properly accounted for in the deal profitability on the Customer
Order itself
Editable costs on F&I products on deals
When working with line items in the F&I products section of a deal that have a cost associated with them,
the user can now edit the cost on these line items
For this functionality to be available the user must have the Unit Costs permission enabled
Any changes to these costs will be properly accounted for in the deal profitability on the Customer Order
itself
F&I products from other companies
User can select F&I products from other finance company vendors
When a product from a different vendor is listed in the F&I products of deal financing it will clearly
indicate which ones are from other finance company vendors
The only exception to this is for products with a cost method of Price withheld or Cost withheld
Since they are specific to that vendor we will not allow them to be added to a deal being financed by
another finance company
Finance products - New cost methods
There are two new cost methods on Finance products in order to provide a more accurate amount payable
by the finance company
Quite often the amount the finance company will pay to the Dealership is different from what is calculated
as the Amount Financed on the deal
The price of some products is not reimbursed by the finance company while for others they may hold
back the cost of the product
To facilitate this Financing products now have two new cost methods - Price withheld and Cost withheld
Now when we calculate the expected payment from the finance company, we will deduct from the amount
financed either the price or the cost of the product
A loan registration fee is an example of a Price withheld product. A financing product which the same
finance company provides for the Dealership to resell could have the cost of that product withheld from the
finance company's payment to the Dealership
The withheld type of financing products can only be added to deals that are financed by that same finance company
This is an example of different finance products with different Cost Methods
Finance company payments on customer order
Now that we can accurately calculate what the actual payment from the finance company will be by taking
into account not only the amount financed but also any F&I product prices or cost they may not pay back to
the Dealership or any financing commissions being included in the expected payment amount, we will no
longer allow the user to enter the amount received from them because it is now a known value
The payment method will still be available in order to record the payment being received but the amount of
that payment will be auto-populated and restricted to the known amount payable to the Dealership from the finance company
Financed deal accounting entries
The COGS journal entry for the deal invoice will take care of properly accounting for any prices or costs which were withheld by the finance company
It will also take care of properly accounting for the financing commission income recorded on the deal financing
Here is an example of a financed deal that has both withheld F&I products AND Financing commissions ARE included in the payment from the finance company
And here is how this is reflected in all of the accounting entries for the deal
And here is the same example except but now the Financing commissions ARE NOT included in the payment from the finance company. So the Deal invoice COGS JE will make use of the new Finance Commission Clearing control account
NOTE - If a GL account has not been assigned to either the Finance Commission Income or Finance Commission Clearing control accounts, the entries for the commission income will not be included in the journal entry
Financed deal documents
In the three different documents that can be generated for a financed deal a few changes have been implemented
These documents are the Bill of Sale, Offer to Purchase, and the Invoice
The payment listing on these documents will now only include customer-related payments
Finance company payments will not be included in this listing
The Amount Paid total will now only reflect the actual amount paid by the customer
The Due from Financing will never reflect the actual amount that is being received so it doesn’t reflect any commissions earned or product prices/costs that are withheld
New “Funded” status
A new status has been introduced for the financing section of financed deals called “Funded”
Now the different status values for the financing section are: Quotation, Submitted, Approved, and then once the funds have been receiving onto the Customer Order - the last status is Funded
This “Funded” status will be automatically set when the finance company payment is accepted against the deal
Unit Deal status restrictions
The following restrictions are now in place:
Financing cannot be set to Approved unless the Unit deal has already been set to Approved
For approved deals, restrictions will also be placed on the deal merch/service to ensure that the deal values do not get inadvertently modified. These restrictions are:
line items cannot be added, deleted or moved
Line item quantities cannot be changed
Deal status cannot be set to Approved when there are unresolved fulfillments
Deal status cannot be set away from being Approved if the deal financing status is Approved or Funded