Subvention

Subvention

Purpose

The purpose of subvention functionality is to enable leasing companies to manage a variety of subvention scenarios. Subvention can vary for each financial product and may have different base rates across different programs. This functionality allows leasing providers to easily set up and configure various combinations of subventions, making it easier for them to offer competitive and attractive leasing options to their customers.

1. Leasing Setup

Relevant fields on Leasing Setup:
Subvention Batch Posting Rule – defines if subvention batch posting will create and post actual sales document or just G/L transactions.
Subvention Batch Posting No. Series – subvention batch number series.
Invoice Type for Subvention – if Subvention Batch Posting Rule is set via Sales Invoice, than sales invoice type will be assigned to the document.

2. Financial Product Setup

To setup how subventions are used, field Subsidy Dr Posting should be selected in Financial Product setup. There are 3 options:
No posting on Activation - no postings occur on activation and subvention batch must be used to invoice subsidy payers;
Receivable - subsidy payer is invoiced and balanced with deferred revenue account (Leasing Posting Setup fields are used: Subvent. Deferred Income (BS) and Subvent. Amortization Profile);
GL Clearing Acc. - Subsidy amount is posted to deferred revenue account and balanced with clearing account. Fields used for posting: Subvent. Deferred Income (BS), Subvent. Amortization Profile), Subsidy Receiv. Clearing Acc.

Figure 1. Financial product setup, Accounting and Tax fast tab

3. Leasing Posting Setup

It is required to fill in account numbers in Leasing Posting Setup for each financial product to be able to use subventions. Fields that must be filled:
Subvent. Deferred Income (BS)
Subvent. Amortization Profile
Subsidy Receiv. Clearing Acc.
Subvent. Income (PL)
VAT on Subvention (Group).

Figure 2. Leasing Posting Setup

Figure 3. Leasing Posting Setup

4. Program Setup

In order to use subvention on contracts, the financial program must have the “Calculate Subvention” field checked and the “Subvented By” field populated.

Figure 4. Mandatory program fields

5. Schedule

When creating an application and selecting a program with subvention, you can confirm that the subvention has been added and calculated by navigating to the Installment schedule, then Commission / Subvention fast tab. This will allow you to verify that the subvention has been properly applied to the contract.

Figure 5. Subvention in schedule

6. Contract Activation

If subvention was either Receivable or GL Clearing Acc. In financial product setup, then general ledger entries will be created upon contract activation.

Figure 6. Subvention GL entries

7. Subvention batches

If the subvention was not posted during activation, it must be done manually. To do this, navigate to the Subvention Batches page and create a new batch. Then, use the “Suggest Subvention” action to automatically fill in the batch lines with subventions that need to be invoiced manually. Fill in Invoice Posting Date field before using the “Issue Sales Invoice” action to create sales invoice, it will populate Invoice No., Invoice Document Date fields and Invoiced will become checked, batch field Posted will be checked.

Figure 7. Subvention Batch

When the invoice is posted, it can be found in Posted Sales Invoices. Sales Invoice Type will be SUBVENTION and sales lines will have lines from subvention batch.

Figure 8. Posted sales invoice created by subvention batch