+ Contracts

Contracts

These products make you the expert in asset leasing, service contracts, property investment and other asset financial instruments.

Activa gives you the tools to manage all of your contractual liabilities to IAS 117 compliance standards and integrates this with your asset register.

Evaluate your financial options before you commit. It doesn`t matter whether you are the lessor or the lessee, whether the equipment you are leasing is a vehicle, computer, aircraft or an office. This is the only software solution that contains the necessary tools backed up by the experience you need to meet your management needs.

Detailed amortisation schedules, contract options, payment transactions and documentation means no more fumbling around with spreadsheets every month. Automated payment transactions and accounting journals posted directly to your General Ledger with detailed reports to reconcile to your bank statements.

Activa has been developing and marketing lease accounting solutions since 1990 and has taken all of this long experience to produce a management tool that surpasses all others in its functionality and simplicity of use.

One of our clients recently wrote;

"It may interest you to know that as a result of installing Activa and computing interest accurately on structured contracts, we have discontinued our arrangements with a broker resulting in immediate savings of several hundred thousand dollars in brokerage fees on a number of recent leases. An excellent payback."

Mike Wilson, CFO, City Beach Surf Australia.

Finance and Operating Contracts

This module provides a full range of contract options for the business that finances the acquisition of its assets, services and property through finance or operating contracts. It is in use with a very broad range of disciplines from small business to multi-national corporates, business services organisations and major national government departments. It inludes all of the following contract types;

Finance lease
Hire purchase [chattel mortgage]
Equity finance
Operating lease
Property tenancy contracts
Service contracts

Sales & Revenue Contracts

Sales and Revenue Contracts is a solid platform for those organisations whose business is based on general property investment or the direct financing of goods and services. Again, a full range of contract types is available to accurately reflect the nature of the contractual arrangements and includes the following;

Capital sales lease
Operating lease
Equity finance
Hire purchase
Property tenancy contracts
Service contracts

Structured Contracts

A very strong feature of Activa contract software is its ability to provide seamless transition of title from leased to owned. Contract roll-overs, changes to contract terms and conditions are dealt with in a simple and effective manner regardles of the conditions.

Contracts with multiple capital draw-downs, irregular payment periods, deferred payments,irregular payment amounts or, in fact, early retirements or terminations are dealt with in a similar manner.

Using a hybrid ‘Structured’ contract type Activa has developed an enhanced capability to deal with virtually any complex conditions.

Contract Management

Contract Management is an extension to the Sales & Revenue Contracts module and is designed to provide the additional tools required for monitoring and managing the leasing process from end to end. It deals specifically with automated revenue remittance requests and processing, cash flow reporting and interfaces to bank reconciliations. It is particularly strong in the task of initiating default fees and penalty interest charges where client payment defaults occur.

Recognition of leased assets in the register generates the appropriate journals to the lease liability accounts in the balance sheet.
The asset record is used to defines the type, Location and Cost Centre of the leased asset and therefore permits the accurate generation of both periodic journals and internal charges to the Profit and Loss and Balance Sheet.
Amortisation in the accounting book of a leased asset offsets the value of assets under lease in the balance sheet.
Termination of a contract automatically purchases or disposes of a leased asset in the asset register and generates the contract termination journals.

Contract Reporting

Contract reporting operates at three distinct levels; the individual contract, the contract type and creditor level and the business level. These do not include the normal amortisation charge reports from the asset register or the period end general ledger journals. All report output can be directed to spreadsheet or PDF file formats as required.

Contract Level Reporting:
The main report from the contract document summarises the contract information and the amortisation schedule providing details for each payment broken down into interest, principal, charges and taxes. For some examples of some these please follow the links below;

Contract Type and Creditor Level Reporting:
This is a very powerful feature and one that creates a Lease Commitment Assessment to accounting disclosure requirements in a matter of seconds. It uses a smart grid function to group contracts by creditor, type or numerous other selected criteria, for any balance date, past, present or future, for the entire term of the existing contracts. Outstanding liabilities are broken down to current and non-current liability balances with balances of future minimum lease payments and net present value calculations included.

Business reporting:
The Contracts Business Reports use the leased asset values from the asset register to apportion the value of the periodic contract payments and uses this to create an allocation of charges to individual cost centres, or operating locations. A similar approach is used for budgeting future contract charges with the Contracts Future Payments report.

Lease amortisation and periodic journals:
Lease amortisation reports are simply depreciation reports restricted to the leased asset ownership type. On this basis the number of available reports is as broad as your imagination. Periodic contract journals are extremely flexible and can be set up to reflect IAS and GAAP, or in the case of privately owned organisations, accounting ease. Individual journal mappings can be quickly configured for capital leases, operating leases, property leases, hire purchase and equity finance. Using the Activa GL interface option ensures that lease and finance journals are automatically generated when processing all other normal depreciation journals.

Contract documentation and events

Contracts are provided with three additional facilities in an effort to simplify their day to day management.

Notes:
The contract Notes panel is a free-form notepad for ad hoc notes and may be edited and added to at random. It is not intended as a reportable function and is not necessarily intended as a secure repository for contract details.

Documents:
The contract documentation panel is an information retrieval system designed to enable copies of relevant OLE type documents such as word processing, spreadsheet, image, PDF and any other OLE compliant file type to be deposited into the database and retrieved as required. This feature is often used to carry scanned copies of the formal, legal, signed contracts.

Event Alerts:
The Event Alert function allows users to post future reminders against individual contracts to provide prior notice of impending events. These alerts are user specific and are automatically presented to the user by internal email when they fall due. For instance, the types of events requiring alerts for a Property Contract are rental escalations, pending contract expiry and general user defined alerts.

Related Information

These notes are intended as a product brief and should not be read as the full specification of Activa software. If you have more specific questions please use the Search option on this site. If you do not find what you are looking for on other pages of this site please complete a Contact Request noting your area of interest and we will respond by return.

The following pages contain information related to the Capital Finance Contracts module;

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Article last updated : Feb 23 2012 10:43AM