Payoff for Installment Loans

Use

You use this function to enter full payoffs for loans within position processing.

This function does not support batch input.

Note Note

You can only use this function for loans that are based on the product category Installment Loans (360). Use the Payoff function or the Payoff for Installment Loans function for loans based on other product categories.

End of the note.

Integration

You can use this function in the Workplace for Business Operations . You use it to enter a payoff quote and to execute the actual payoff.

The status concept is upheld during the processing of the business operations in that, from a technical point of view, a payoff quote corresponds to a payoff that is held in status Entered . Payoff quotes cannot be activated or posted.

A loan officer usually responds to a request from a customer by creating a payoff quote for the loan in question.As soon as the corresponding payment has been made by the borrower, the system converts the incoming payment into a regular payoff within the functions for Extended Incoming Payment Distribution and posts the payoff.

Note Note

If the system cannot create a payoff within extended incoming payment distribution because an error has occurred, you can process the payoff manually using this function in the Workplace for Business Operations . The loan officer creates the requested payoff manually and posts it. This may be the case, for example, if the borrower has sent a payoff amount that is less than the amount required as per the payoff quote, taking the defined tolerance limits into account.

End of the note.

The creation of payoff quotes and payoffs is integrated in the release procedure.

You can use user exits in the general business operation modules for reading and saving your own data.

Prerequisites

Payoff

To be able to use this function you need to have executed the following IMG activities in the Customizing for Loans Management :

  • In the IMG activity Define Product Types, you need to have activated the payoff function for the relevant product type.

  • To enable the system to process the flows for the payoff correctly, you have defined the flow types, and the offsetting flow types for the flows for the payoff under Define Flow Types.

  • In the IMG activity Assign Offsetting Flows, you need to have assigned offsetting flows to the flow types so that the system can clear the payoff amount.

  • In the IMG activity Define Account Determination , you have defined the account determination for the flow types, for further processing of the amounts.

  • In the IMG activity Define Condition Groups, you need to have assigned the application subfunctions relevant for the payoff to each of the usable flow types in the subscreen Assign Flow Types to Condition Groups per Application .

    In the IMG activity Assign Condition Types to Condition Groups per Application, you must assign the condition type used within the payoff.

  • In the IMG activity Define Cash Flow Behavior, y ou need to have defined the cash flow behavior for each condition group of a condition type.

  • In the IMG activity Define Templates (under Payoff ), you need to have defined templates for the payoff, so that you can use these to create payoffs in the Workplace for Business Operations .

  • In the IMG activity Define General Control Data (under Payoff ), you need to have determined the tab pages that will be available in the application.

    You can also define the stops here that the system is to set for the loan within the payoff function.

    For more information, see Stops .

  • In the activity Define Reasons for Payoff (in the section Payoff ), you can define the possible reasons that the user can use for the payoff.

  • In the IMG activity Set Payment Lock within Lock Management, you can determine a payment block for each company code and application function. The payment block prevents open items that have been reserved by the saving or activating of the Payoff for Installment Loans function from being cleared by the execution of other functions.

  • In the activity Define Flow Type Groups for Receivables List (under Payoff for Installment Loans ), you need to have grouped the flow types that you want to display together as a collective item in the receivables list for the payoff. In this way you can adjust the content of the receivables list to suit the requirements of your organization.

  • In the activity Define Subcategories for Receivables List (under Payoff for Installment Loans ), you need to have defined the collective items that you want to display in the receivables list and assigned flow type groups to each of these items.

  • Under Define Communication Status (under Payoff for Installment Loans ) you need to have defined values for the communication status of the payoff. These values are then available on the Administrative Data tab page.

    You also need to have defined whether each value refers to a payoff quote or a payoff and whether or not the business operation can still be changed.

    Example Example

    You should indicate a communication status New Payoff Quote as a business operation Payoff Quote and as Can be Changed .

    On the other hand, you should indicate a communication status Sent to Customer per Post as a Payoff Quote and as Can no Longer Be Changed . This ensure that the dataset is the same for the borrower and the lender.

    End of the example.
Product

You need to have made the settings for this business operation in the Product on which the loan is based. You define products in the SAP Easy Access screen, under Current Settings .

In particular, you need to specify the amount tolerances that the system is to take into account when it creates a payoff within the functions for Extended Incoming Payment Distribution .

Example Example

The system only accepts an incoming payment from a customer for the creation of a payoff within the functions for extended incoming payment distribution if the difference between the payment amount and the amount that the customer was informed about in the payoff quote is less than 5 %.

If the incoming payment deviates from the amount in the payoff quote by more than 5 %, the loan officer responsible must process the incoming payment manually.

End of the example.
Release

If you want to use the release function within the payoff function, you need to make the appropriate settings for the payoff in the activities Maintain Active Indicators, Define Release Status Parameters, and Maintain Workflow Settings in the Release section.

For more information, see the Prerequisites section in Release

Correspondence

If you want to use the correspondence function within the payoff function, you need to complete the IMG activities in the Correspondence with Correspondence Tool (SAP Smart Forms) section in Customizing for Loans Management .

In the IMG activity Define External Flow Types, you need to have replaced the flow types relevant for the payoff, such as processing charges, with external flow types.

In the IMG activity Assign External Flow Type to Report Category, you need to have assigned the Report Category 02 (External Account Statement, Payoff Letter) to the flow types.

Features

In addition to the general loan data in the loans header, such as the company code, loan number, product, disbursement status or name and address of the current main borrower, the system also displays the business operation status ( New, Entered, Activated, for example) in the Business Operation Header. In the BO Text field you can either enter a posting text manually or using the input help (F4). This description is then transferred to the Text field in the Additional Posting Data screen. You can change the default text here. Once the posting has been executed, the text appears on the FI document header.

Note Note

You define the posting texts that are available as possible entries in the IMG activity Define Company Code-Specific Texts.

End of the note.

If the release function is activated, you forward the Payoff for Installment Loans business operation to the inbox of the Business Workplace using the To be Released function. From there, it is released. You can release, activate or post the business operation directly from the Release function. The system also displays the release status in the Business Operation Header . You cannot change this here.

You can also branch to the following dialog options:

  • By choosing Start of the navigation path Environment Next navigation step Change Documents, End of the navigation path you can display the change documents for the business operation. You can also display these from the release work item, if the release is activated.

  • By choosing Cash Flow you can have the system recalculate and display the new cash flow, with or without consideration of the payoff or display the current cash flow.

  • You can have the system output the current Payment Plan or the payment plan with or without consideration of the payoff.

  • By choosing Display Contract you can branch directly into the loan contract screen.

  • You can display the Loan Summary, the Total Commitment or the Account Statement for the loan.

  • Choose Generate Correspondence to generate the relevant correspondence for the payoff, dependent on language and partner role.

On the lower part of the screen you can make entries in the tab page that you activated in the IMG activity Define General Control Data . You can also define the initial tab page in Customizing. The following tab pages are available for the Payoff function:

Activities

  1. In the SAP Easy Access Menu chose Start of the navigation path Accounting Next navigation step Bank Applications Next navigation step Loans Management Next navigation step Position Management Next navigation step Business Operations Next navigation step Workplace for Business Operations Next navigation step Payoff Next navigation step Create End of the navigation path .

  2. Select the relevant payoff case. You can define the control settings for the templates in the IMG activity Define Template . You can change the predefined fields that are filled by a template. For more information about using the Workplace for Business Operations, see the documentation for Business Operations .

  3. Enter or change the relevant data and save, then activate or post the business operation.

    Note Note

    You can also copy an entered or activated payoff including all data, such as open items, internally for documentation purposes.

    End of the note.