There are two types of escalation processes that may be used, namely Fixed Rental or Interest Rate. Both processes are defined here. The Fixed Rental process introduces the facility to generate entries for customer rentals and budgets using specific calculation basis. The calculations require input of key data which has to be input before the Agreement Rental and budget values are calculated. This data is located in the Fleet Quotation module. The Interest Rate is required because it is the practise in some countries to base rentals to the customer on the interest rate set by central government. This interest rate is as the Prime interest rate. When calculating the customer finance rental the Prime interest rate +/- an adjustment is used to calculate the rental using the =pmt formula. Branches are charged a management fee. This is known as Lease income. The calculation is the same as that for the customer rental (=pmt), but the interest rate used is Prime less an adjustment, and is known as Cost interest rate. The facility is therefore required to amend the Customers finance rental and the Lease income, based on a change to the Prime interest rate.
What do you want to do?
The following step by step process should be followed:
Before an agreement can be created using the escalation process a certain amount of pre-requisite set-up must be carried out. The Escalate Tab contains the Use escalate calculation method? checkbox which must be ticked to activate the escalation functionality in both the Fleet quotations (FQ) and Fleet Kompact (FK) modules. The Escalate Report and Interest Report formats used later in the process are are also stored within this tab.
The Use FQ module checkbox held in the Kompact System Parameters General Tab must also be ticked on. If left unselected then agreements cannot be created via Fleet Quotations where the first stages of the escalation process are carried out.
Two fields must be defined within the System Controls Escalation Tab prior to use of the Escalation process.
The Cost percentage i.e. what is charged by the bank. This should be set to the latest Cost Interest rate. This is used as part of the calculations for Lease income, Contract Depreciation & Tax depreciation.
The Prime Percentage. This should be set to the latest Prime interest rate as released by Central Government. This is used as basis for the calculations of the Customer Finance Rental.
Set up the Posting Elements Table
The Posting Element file is a background file that is used in conjunction with Posting tables. New Posting element records require setting up for use with the escalation process which then allows postings to accounts. The fields described below are required as part of the process:
Name Code Customer Rental Capital CFCAP Customer Rental interest CFINT Lease income LCREN Lease income capital LCCAP Lease income interest LCINT Depreciation RV Charge DRREN Depreciation RV Capital DRCAP Depreciation RV Interest DRINT Depreciation Tax Charge DTREN Depreciation Tax Capital DTCAP Depreciation Tax Interest DTINT
The Posting Element codes should be set-up as below:
Field Value Posting element code per above list Element description per above list Element Group AGREE MPT Slot First available (or nearest) slot number. FQ Product slot Leave Blank Type Leave Blank Mntt Actual slot Leave Blank This is a one-off exercise.
Set up the Posting Table with the new Posting Elements
The new Posting elements should then be incorporated within the appropriate product postings tables within the Vehicle Admin Tab.
Please note that the posting Basis for the new elements are hard coded so whatever is entered will be ignored by the system, apart from:
Code Description Value CFINT Customer Rental Interest Set Basis to TFLARR (in arrears) LCINT Lease income Interest Set Basis to TFLNORM ( in advance) DRINT Depreciation RV Interest Set Basis to TFLNORM DTINT Depreciation Tax Interest Set Basis to TFLNORM Set Type (I/N) to N for all new elements apart from the ones listed above (which should be set to I).
Define the appropriate Product Splits
The appropriate Split Method needs to be defined within the Products Table. One of the Escalation routine functions is to allow different rental elements to be increased by the same or differing amounts. The Split method is assigned to identify the rental element as being either Finance or Maintenance.
Produce a Quotation in Fleet Quotations (FQ) module
Generate a normal quotation within the Fleet Quotations module.
Select a Product Type that has been defined with the appropriate escalation posting table elements.
Select the 
icon
and select the Escalate Tab.
Select the Rental Fixed? checkbox in order to initiate the Fixed Rental escalation process.
Select the Escalate Rental?, Escalate XS Rate? and Escalate Maintenance? checkboxes as required for each of the elements chosen to be effected by the escalation and enter the appropriate corresponding escalation percentage value.
Convert the Quotation into a contract
Convert the Quote into an agreement
Initiate the Start Contract process.
The Escalate Tab within the Agreement form is now populated with the selections that were made within the Escalate Tab of the Quotation Finance Review form.
On the anniversary of the Contract Start Date the Escalation process within the Accounts area will locate this agreement and escalate the appropriate elements by the percentage values held within the Escalate Tab.
The Escalation element postings may be viewed in the Agreement Postings Tab.
Initiate the Escalation Process
Select the Escalations 
shortcut form the Accounts Menu on the left of the Contract Management form to display
the Escalations form.
Enter the required selection criteria and select the
icon. This searches
for all agreements that meet the matching the selection criteria that is entered and are due to be
escalated. These agreements are merely reported on at this stage using the
Escalate Report defined within the System Parameters
Escalate Tab (typically K54). This report is
run to view the escalation values for the affected agreements prior to actually generating
the increases. Both the old and the new escalated values are displayed in the report.
If the values contained within the report appear to be sensible then the Update? checkbox should be ticked to actually generate the escalation values.
If an agreement is being captured by this process for the first time then the values within the Postings Tab will be escalated from period 13 onwards.
For each agreement that is escalated the Next Escalate Date is moved forward by one year.
This change of values is recorded as an audited event and both the original and new values are audited.
It is the practise in some countries to base rentals to the customer on the interest rate set by central government. This interest rate is as the Prime interest rate. When calculating the customer finance rental the Prime interest rate +/- an adjustment is used to calculate the rental using the =pmt formula. Branches are charged a management fee. This is known as Lease income. The calculation is the same as that for the customer rental (=pmt), but the interest rate used is Prime less an adjustment, and is known as Cost interest rate. The facility is therefore required to amend the Customers finance rental and the Lease income, based on a change to the Prime interest rate.
What do you want to do?
The following step by step process should be followed:
Before an agreement can be created using the escalation Interest Rate process a certain amount of pre-requisite set-up must be carried out. The Escalate Tab contains the Use escalate calculation method? checkbox which must be ticked to activate the escalation functionality in both the Fleet quotations (FQ) and Fleet Kompact (FK) modules. The Escalate Report and Interest Report formats used later in the process are are also stored within this tab.
The Use FQ module checkbox held in the Kompact System Parameters General Tab must also be ticked on. If left unselected then agreements cannot be created via Fleet Quotations where the first stages of the escalation process are carried out.
Two fields must be defined within the System Controls Escalation Tab prior to use of the Escalation process.
The Cost percentage i.e. what is charged by the bank. This should be set to the latest Cost Interest rate. This is used as part of the calculations for Lease income, Contract Depreciation & Tax depreciation.
The Prime Percentage. This should be set to the latest Prime interest rate as released by Central Government. This is used as basis for the calculations of the Customer Finance Rental.
Set up the Posting Elements Table
The Posting Element file is a background file that is used in conjunction with Posting tables. New Posting element records require setting up for use with the escalation process which then allows postings to accounts. The fields described below are required as part of the process:
Name Code Customer Rental Capital CFCAP Customer Rental interest CFINT Lease income LCREN Lease income capital LCCAP Lease income interest LCINT Depreciation RV Charge DRREN Depreciation RV Capital DRCAP Depreciation RV Interest DRINT Depreciation Tax Charge DTREN Depreciation Tax Capital DTCAP Depreciation Tax Interest DTINT
The Posting Element codes should be set-up as below:
Field Value Posting element code per above list Element description per above list Element Group AGREE MPT Slot First available (or nearest) slot number. FQ Product slot Leave Blank Type Leave Blank Mntt Actual slot Leave Blank This is a one-off exercise.
Set up the Posting Table with the new Posting Elements
The new Posting elements should then be incorporated within the appropriate product postings tables within the Vehicle Admin Tab.
Please note that the posting Basis for the new elements are hard coded so whatever is entered will be ignored by the system, apart from:
Code Description Value CFINT Customer Rental Interest Set Basis to TFLARR (in arrears) LCINT Lease income Interest Set Basis to TFLNORM ( in advance) DRINT Depreciation RV Interest Set Basis to TFLNORM DTINT Depreciation Tax Interest Set Basis to TFLNORM Set Type (I/N) to N for all new elements apart from the ones listed above (which should be set to I).
Define the appropriate Product Splits
The appropriate Split Method needs to be defined within the Products Table. One of the Escalation routine functions is to allow different rental elements to be increased by the same or differing amounts. The Split method is assigned to identify the rental element as being either Finance or Maintenance.
Produce a Quotation in Fleet Quotations (FQ) module
Generate a normal quotation within the Fleet Quotations module.
Select a Product Type that has been defined with the appropriate escalation posting table elements.
Select the icon
and select the Escalate Tab.
The Rental Fixed? checkbox should be left unticked.
The Prime Interest % should be set to the latest Prime interest rate as released by Central Government. This is used as basis for the calculations of the Customer Finance Rental. The default value comes from the value held within the Escalation Tab.
The Prime +/- % may be used to for an additional +/- percentage value to be added to the Prime Interest %. The Prime Interest % plus the Prime +/- % gives the Contract Interest; this is the percentage used to calculate the Customer Finance Rental.
Select the Escalate XS Rate? and Escalate Maintenance? checkboxes as required for each of the elements chosen to be effected by the escalation and enter the appropriate corresponding escalation percentage value. The Escalate Rental? can no longer be selected using this process.
Convert the Quotation into a contract
Convert the Quote into an agreement.
Initiate the Start Contract process.
The Escalate Tab within the Agreement form is now populated with the selections that were made within the Escalate Tab of the Quotation Finance Review form.
On the anniversary of the Contract Start Date the Escalation process within the Accounts area will locate this agreement and escalate the appropriate elements by the percentage values held within the Escalate Tab.
The Escalation element postings may be viewed in the Agreement Postings Tab. These are generated using the PMT calculations based on the Product set up and interest.
Select the Interest 
shortcut form the Accounts Menu on the left of the Contract Management form to display
the Escalations form.
Enter the required selection criteria and select the
icon. This searches
for all agreements that meet the matching the selection criteria that is entered and are due to be
escalated. These agreements are merely reported on at this stage using the
Interest Report defined within the System Parameters
Escalate Tab (typically K56). This report is
run to view the escalation values for the affected agreements prior to actually generating
the increases. Both the old and the new interest values are displayed in the report.
If the values contained within the report appear to be sensible then the Update? checkbox should be ticked to actually generate the new interest values.
If an agreement is being captured by this process then the Postings Tab are modified accordingly with the interest element being updated for the next month onwards. If the run falls, for example, in the middle of a month, then a negative/positive charge is posted for the difference.
The Last Interest Update Date field is updated in the Escalate Tab of System Controls.
This change of values is recorded as an audited event and both the original and new values are audited.
