Homnet Leasing Calculator

Homnet Leasing Calculator is a flexible powerful tool to support leasing activities. The module has been developed with regard to all modern tendencies of the Russian lease market development and is continuously improved. The calculator has been implemented and used in such companies as Mercedes-Benz Financial Services Rus, MAN Financial Services, De Lage Landen Leasing, Deutsche Leasing Vostok, BOT Lease (Eurasia), Intesa Leasing, and others.

Functionalities

Calculator use methodology during initial calculations includes the following steps

  • when the calculator is launched the system determines the parameters in accordance with the user default setting. All the standard values shall be propagated automatically
  • selection of the leased item. A leased item can be selected either from a detailed nomenclature directory with models and packages or from a generalized guide "Types of Leased Items" (a car, a tow-car, a mini-bus, etc.)
  • selection of the lease program. When the program is selected all the parameters depending on it, such as the lease payment, the down payment rate, etc. shall be propagated automatically. The rules for parameter propagations are set in the user mode; no programmers need to be involved
  • setting base deal parameters. They include cost of the leased item, the down payment rate, lease term, the lease payment, rate of commissions for concluding the contract and conversion, and others
  • buy-out payment determination. A buy-out can be done in a single payment or advanced during the whole lease period. Besides the scheme for calculating the down payment for the purchase payment included into the initial payment has been implemented. The system gives a signal if the redemption payment is lower than the residual cost at the end of the leasing
  • accounting and reimbursement of additional costs. The system supports calculation of standard costs, such as insurance, transport tax, agency commission, registration at the road police, etc. Besides there is a possibility to add any number of non-recurrent and periodic expenses (delivery, servicing the alarm system, etc.). For each expense the way of reimbursing it (including into the lease payments) may be chosen. Both "arithmetical" (inclusion into the selected payment or even distribution within the selected periods) and "financial" (in proportion to the principal repayment, inclusion into the investment keeping the total annuity amount) ways are implemented
  • accounting of additional incomes. Various subsidies and rebates, agency commissions from insurers, etc. can be treated as income. Additional incomes are included into the calculation of the efficient yield rate
  • accounting of cash flows in the investment period can be simplified (only the item value and the percent of the down payment are set) and detailed. In the latter case the schedule of payments to the supplier and the schedule of receiving advance payments shall be entered. The interests calculated before transfer for leasing with regard to those schedules may either increase the initial financing amount or be included into the first payment
  • setting currency exchange rates. All the components of the total amount may be entered in different currencies that differ from the lease payment currency. Recalculation is performed based on cross-rates set within the calculator. Depending on the calculation type those may be either standard planned or actual exchange rates
  • payment schedule management is performed in two stages:
    • various repayment schemes are set in the directory "Leasing Payments Strategy" in the user mode. The main principle is set for each profile (whether it is applied to the principal or to lease payments), as well as additional parameters whether seasonal or not, payment and grace periods, availability of several steps. In case of ladder strategy their length and width shall be specified, otherwise slope coefficient can be set (linear or non-linear). With the help of this directory both standard strategies, such as "regressive with even repayment of the principal" or "annuity payment", and more complex ones can be set easily
    • it is possible to select a "base" strategy in the calculator and update it. In particular relative coefficients can be changed manually, or else amounts can be manually entered in any periods. If the main strategy principle is application to lease payments, then during the calculation the system will select the parameters in such a way where the final lease payments (with regard to all reimbursed expenses) shall precisely match the establish coefficients and amounts

Due to the fact that the calculator is used in numerous companies of various industries, it supports a number calculation algorithm options (how to calculate the buy-out payment, how to calculate interest on the unpaid VAT, what commissions to use, etc.). That will make it possible to perform implementation with minimal expenses, without involving programmers, with the possibility to reconcile the amounts with Excel files.

The result of the calculation except the payment schedule itself shall be

  • various analytical coefficients including appreciation rate, efficient rate of return, etc.
  • chart of correlation between the unpaid balance of the financing amount and the market value of the leased item
  • graphical representation of the payment structure (aggregate and detailed with split by periods). Makes it possible to visually evaluate the relation of the principal, the interest, the refundable expenses, VAT, and other payment components.

Beside the standard schedule calculation services for matching calculation parameters to specified criteria are implemented

  • matching to a competitor's schedule. It is sufficient to enter several parameters (cost of items, inclusion of reimbursable expenses) and to copy to the calculator the competitor's payment schedule from Excel. Further the system will select values for other parameters the lease payment, principal repayment and others to get exactly the same amounts as the competitor's. Based on that the manager can make conclusions whether the competitor has included insurance, whether there are possibilities for competition, etc.
  • matching the lease payment to the target amount of the annuity payment
  • matching the lease payment to the target rate of return. In particular it is possible to use the setting when the user immediately sets the target efficient rate of return. And the system will each time select the nominal lease payment based on the efficient rate of return

Based on the results of the calculation various print forms can be generated. Standard pre-set forms "Commercial Offer" and "Payment Schedule" Application" are implemented in the system Homnet Leasing 14, which make it possible to use the system straight away with minimal implementation costs.

The calculator supports the methodology of "item-based schedules" optionally implemented in Homnet Leasing 14. Herewith, all the calculations are technically performed per each leased item, and for printing and document generation such "item-based schedules" are united using the mechanism of additional agreements to contracts. This approach considerably simplifies processing of changes in contracts on partial transfers and partial retirements. To simplify user work with the "item-based schedules" various services integrated with the calculator is used.

The calculator provides the possibility to perform both initial calculations (for preparing commercial offers, on concluding contracts, reviewed on transfer for leasing) and restructured from the specified period:

  • when the payment schedule changes. Practically any parameters term, rate, payment periods, etc. can be used
  • on early buy-out. Several rules of determining the buy-out payments have been set, including those regarding correlation of payments and accruals
  • on insured events. The compensation payment is calculated with regard to the insurance indemnity amount
  • on withdrawals

Advantages

For employees responsible for automation

  • minimization of risks when using ready-to-use, many times verified functionality
  • simplicity of implementation due to a large number of ready-to-use setting options

For heads of sales departments and managers

  • improving control and risk minimization due to transfer from Excel to an automated system
  • competitiveness increase due to flexibility of calculation schemes and building leasing market best practice

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