Security Deposits in Floor Plan

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Certain financiers use an arrangement known as Security Deposits.  This permits the dealership to bail the stock item for the full purchase price using the Security Deposit to reduce the dollar amount that will actually be payable by the financier.  It is particularly helpful in avoiding the shortfall in ITC available on Notional vehicles when the net bailment amount is less than the Purchase Price.The Security Deposit must be recorded at the time of entering a bailment in the stock card to which it relates.

To permit Security Deposits to be entered, the client card for the Financier must first be configured to permit that using the settings under the Financier button.

When entering the Bailment additional fields for Security Deposits will be visible.  Enter the data into the fields as shown below:

hmtoggle_plus1        Taxable Bailment Amount

Enter the total amount of the bailment including Security Deposit and GST.  Typically in these arrangements, the Taxable Bailment will be equal to the Purchase Price of the vehicle.

hmtoggle_plus1        Net Bailment Amount

The Net Bailment amount is the GST Ex amount the dealer will actually receive from the Financier.  The Security Deposit amount is then calculated by the software; being the different between the GST Ex Taxable Bailment, and the Net Bailment.