Step 4 - Control Accounts - Lien Payout Clearing



  • Let us first define what a Lien Payout actually is - it is the amount payable to a finance company to give the Dealership clear title to a Unit that has been traded in.  


  • This General Ledger account is used as a clearing account and the account type is typically set up as a Current Liability.  At any one time the Dealership will be able to see from the balance of this Lien Payout Clearing General account how much is owing on lien payouts


  • When a Customer Order > Unit Deal containing a lien payout on a trade-in, is finalized but the Dealership is still responsible for paying out the lien



  • Once the Unit Deal is finalized, the lien payout amount will be credited to Lien Payout Clearing General Ledger account 




  • When the Dealership is ready to payout the lien, they have two options:


1. Manually create a Vendor Invoice for the relevant Finance Company for the lien that needs to be paid out and allocate the line item to the Lien Payout Clearing General Ledger account and then pay the lien attaching the payment to this Vendor Invoice


2.  Pay the relevant Finance Company for the lien directly from your bank and allocate the payment directly to the Lien Payout Clearing General Ledger account


Both of the above options will get the desired result - the lien will be paid and a clearing entry will be made to the Lien Payout Clearing General Ledger account



**Note the Lien Payout Clearing General Ledger account is cleared for that transaction