Patent Publication Number: US-2003233299-A1

Title: System and method for classifying a financial transaction

Description:
TECHNICAL FIELD  
       [0001] The present invention relates generally to the sale and leasing of equipment, and more particularly, to a computer based system and method for classifying a financial transaction.  
       BACKGROUND  
       [0002] The purchase or lease of equipment, such as construction or agricultural equipment, engines, etc., is a very detailed process involving complicated financing decisions and financial documents. The process involves determining the type of financing available for the customer, as well as geographic factors. Additionally, depending on the type of financing and the geographic location of the customer, the number, type, as well as the terms of, the documents required vary. From the seller&#39;s perspective, for tax and reporting purposes it is important that once a transaction has been closed that it be classified correctly.  
       [0003] In a typical sale or lease, the first step includes a quoting process. The quoting process involves a discussion with the customer, generally, including determining the equipment which the customer desires to lease or purchase and type and size of desired payment.  
       [0004] The second step is the credit process. The credit process involves requesting and receiving the customer credit scoring from credit bureaus. The credit scoring is used to determine the type of financing available to the customer. Other factors, may also be used to determine the type of financing available, such as the customer&#39;s payment history on past purchases or leases.  
       [0005] Once the financing terms have been arranged, the financing documents must be prepared. As discussed above, the number and type of documents, as well as specific clauses or terms in the financing documents will vary. Factors include customer, lessor, geographic location, and type of financing.  
       [0006] Recently, one or more of the above steps have utilized computer software programs to automate various sub-steps of the process. Other portions of the process may be done manually. One or more of the computer software programs and/or steps performed manually may classify a given transaction for tax and reporting purposes. This presents several problems.  
       [0007] For example, the rules for classifying transactions may change or the interpretation of a given rule may change. For those processes that are done manually, a transaction may be classified incorrectly because a person is not applying the rules correctly or the person may not have been trained in the most current rules.  
       [0008] With regard to the steps performed by computer programs, in general, the rules are typically part of the computer program. In other words, they are written into the computer program by the programmer or vendor of the program. If a change is required, it is difficult for the user of the system to make the desired changes. It is either more efficient for the same programmer or vendor to modify the software or the same vendor must modify because the user does not have access to the source code.  
       [0009] The present invention is aimed at one or more of the problems discussed above.  
       SUMMARY OF THE INVENTION  
       [0010] In one aspect of the present invention, a computer based method for automatically classifying a financial transaction for an item is provided. The method includes the steps of establishing a set of parameters associated with the financial transaction and classifying the financial transaction as a function of the set of parameters.  
       [0011] In another aspect of the present invention, a computer based system for automatically classifying a financial transaction for an item is provided. The computer based system includes a database for storing a set of predetermined rules and a controller coupled to the database. The controller is adapted to receive a set of parameters associated with the financial transaction and to classify the financial transaction as a function of the set of parameters and the set of predetermined rules. 
     
    
    
     BRIEF DESCRIPTION OF THE DRAWINGS  
     [0012]FIG. 1 is a flow diagram of a transaction process including a financial transaction classification process, according to an embodiment of the present invention;  
     [0013]FIG. 2 is a block diagram of a system for automatically classifying a transaction;  
     [0014]FIG. 3 is a block diagram of a computer program product for automatically classifying a transaction, according to an embodiment of the present invention;  
     [0015]FIG. 4 is a block diagram of a computer program product for automatically classifying a transaction, according to another embodiment of the present invention;  
     [0016]FIG. 5 is a first flow diagram of a method for automatically classifying a transaction, according to an embodiment of the present invention;  
     [0017]FIG. 6 is a second flow diagram of a method for automatically classifying a transaction, according to an embodiment of the present invention;  
     [0018]FIG. 7 is a third flow diagram of a portion of a method for automatically classifying a transaction, according to an embodiment of the present invention;  
     [0019]FIG. 8 is a graphical illustration of a first portion of a graphical user interface, according to an embodiment of the present invention;  
     [0020]FIG. 9 is a graphical illustration of a second portion of a graphical user interface, according to an embodiment of the present invention;  
     [0021]FIG. 10 is a graphical illustration of a third portion of a graphical user interface, according to an embodiment of the present invention;  
     [0022]FIG. 11 is a graphical illustration of a fourth portion of a graphical user interface, according to an embodiment of the present invention;  
     [0023]FIG. 12 is a graphical illustration of a fifth portion of a graphical user interface, according to an embodiment of the present invention;  
     [0024]FIG. 13 is a graphical illustration of a sixth portion of a graphical user interface, according to an embodiment of the present invention;  
     [0025]FIG. 14 is a graphical illustration of a seventh portion of a graphical user interface, according to an embodiment of the present invention;  
     [0026]FIG. 15 is a graphical illustration of an eighth portion of a graphical user interface, according to an embodiment of the present invention;  
     [0027]FIG. 16 is a graphical illustration of a ninth portion of a graphical user interface, according to an embodiment of the present invention;  
     [0028]FIG. 17 is a graphical illustration of a tenth portion of a graphical user interface, according to an embodiment of the present invention;  
     [0029]FIG. 18A is a graphical illustration of an eleventh portion of a graphical user interface, according to an embodiment of the present invention;  
     [0030]FIG. 18B is a second graphical illustration of the eleventh portion of the graphical user interface of FIG. 18A;  
     [0031]FIG. 19A is a graphical illustration of an twelfth portion of a graphical user interface, according to an embodiment of the present invention;  
     [0032]FIG. 19B is a second graphical illustration of the twelfth portion of the graphical user interface of FIG. 19A;  
     [0033]FIG. 20A is a graphical illustration of a thirteenth portion of a graphical user interface, according to an embodiment of the present invention; and,  
     [0034]FIG. 20B is a second graphical illustration of a the thirteenth portion of the graphical user interface of FIG. 20A.  
    
    
     DETAILED DESCRIPTION  
     [0035] With reference to the drawings, and in operation, the present invention provides a computer based system  200  and a method  400  for classifying a transaction related to items or equipment, such as agricultural or construction equipment, engines, or any equipment or item which may be the subject of a financial transaction. The equipment or item may include any product or service that may by the subject of a financial transaction.  
     [0036] With specific reference to FIG. 1, the present invention may be utilized during the creation of a purchasing or leasing transaction  100  for equipment. The creation process may include: a quoting process (flow block  102 ), a credit process (flow block  104 ), a document preparation process (flow block  106 ), and a classification process (flow block  108 ). After the documents have been prepared and the transaction finalized, the sale or the lease of the subject matter of the transaction may be ordered or “booked”. The transaction may be classified using the classification process  108  at different times during the transaction  100 . For example, the classification process  108  may be needed during the quoting  102  and/or the document preparation process  106 .  
     [0037] Generally, a customer desires to purchase or lease one or more pieces of equipment or item. The customer contacts a sales agent, who may be located at either a dealer of the equipment or item or at a financing company. Alternatively, the customer may interact with a user interface implemented on a computer network, e.g., a website on the internet or an intranet.  
     [0038] In the quoting process  102 , the agent works with the customer and determines the equipment or item which the customer wished to purchase or lease and the monthly payment the customer desires.  
     [0039] In the credit process  104 , the sales agent requests a credit scoring for the customer from one or more credit bureaus. This information, along with other information regarding the customer&#39;s history with the financing company, is used to determine whether to extend credit to the customer for the purchase or lease of the equipment and, if so, under what terms.  
     [0040] During the quoting and credit processes  102 ,  104 , the sales agent requests and receives, from the customer, transaction information. As described below, the agent enters this information into the system  200 .  
     [0041] In one embodiment, the sales agent may enter a classification for the transaction, i.e., a desired classification or a “best-guess” classification. As discussed below, the computer system  200  may classify the transaction, compare its classification with the desired or best-guess classification. This may be accomplished by feeding the classification back into the quoting process. If the classifications are the same, the computer system  200  confirms the classification. However, if the classifications are different, the computer system  200  will relay the correct classification, as well as the reasons why the desired or best guess classification is wrong.  
     [0042] Alternatively, another computer system or program used during the transaction process may determine (using its own rules or logic) its own classification and relay its classification to the computer system  200 . For example, a leasing system may be used to assist in putting together a leasing transaction and to assemble the documents. In a similar manner, the computer system  200  may classify the transaction, compare its classification with the received classification and confirm the classification if both are the same. However, if the classifications are different, the computer system  200  may relay the correct classification, as well as the reasons why the received classification is wrong.  
     [0043] With specific reference to FIG. 2, the computer system  200  for classifying the transaction, according to an embodiment of the present invention, will now be described.  
     [0044] The system  200  includes a database  202  for storing a predetermined set of rules and a controller  204  coupled to the database  202 . The controller  204  is adapted to run a computer program application  208  in a conventional manner (see below). In one embodiment, the controller  204  is a stand alone computer  206  operable by a user  210  through a graphical user interface (GUI)  212 .  
     [0045] In another embodiment, the computer  206  is part of a computer network (not shown), such as the internet. The GUI  212  may be run on a second computer (not shown) connected to the network. The GUI  212  may be implemented via a web enabled browser computer program, such as, Microsoft Internet Explorer.  
     [0046] The set of rules stored in the database  202  are used to classify a transaction. The set of rules may be defined and/or modified by another user, such as an administrator (see below). The set of rules may include tax rules and/or accounting rules, e.g., Generally Accepted Accounting Practices (GAAP).  
     [0047] In one embodiment, the computer program application  208  is adapted to receive a country associated with the financial transaction and a set of parameters associated with the financial transaction and to classify the financial transaction as a function of the country, the set of parameters, and the set of predetermined rules.  
     [0048] In another embodiment, the computer program application  208  is adapted to receive a set of parameters associated with the transaction. The set of parameters may include a term having an end and being associated with the transaction, an economic life of the item, a payment amount and a frequency of payment, a value associated with the item at the end of the term, and a rate related to the transaction. The computer program application  208  is further adapted to classify the transaction as a function of the set of parameters.  
     [0049] Additionally, the computer program application  208  may be adapted to request or receive updates of the set of parameters. In one embodiment, the computer program application  208  may be adapted to periodically request parameter updates. For example, the computer program application  208  may periodically access another computer system or database (not shown) that contains the GAAP to determine if there are any updates. Alternatively, the another computer system or database may be adapted to periodically and/or automatically provide any updates to the computer program application  208 .  
     [0050] The user  210  may input the set of parameters and/or the country to the system  200  through the GUI  212 . Alternatively, the set of parameters and/or the country may be entered into the system  200  through a data file  214  or passed to the system  200  from another computer program or system  222 .  
     [0051] In one embodiment, the transaction is classified as either a lease or a purchase. In another embodiment, the transaction is classified as one of an operating lease, a true lease, a lease purchase and an installment sales contract, e.g., a promissory note or a governmental lease purchase. In one embodiment, the classification may be based on the country, the set of parameters and a set of predetermined rules. These terms are generally defined below per US Tax and US GAAP rules. However, each country may define the book and income tax terms differently. For a particular set of country, state and local tax rules, the jurisdictional definitions will be applied.  
     [0052] Operating Leases are leases that are fixed assets for book purposes, which may or may not pass the tax rules. The set of rules are applied to the lease and include a four item-test. If the contract does not pass any of the four tests then it will be considered an operating lease. Under an operating lease, the lessor has ownership of the asset for book purposes and generally has ownership for tax purposes. The lessee or customer is simply paying for the use of the asset and has no equity built up in the asset. In general, the four tests are:  
     [0053] the lease period is more than a percentage, e.g., 75%, of the economic life of the asset  
     [0054] the payments are more than a percentage, e.g., 90%, of the net present value (NPV) of the asset  
     [0055] there is an automatic transfer of the asset at the end of the lease; and  
     [0056] the lease contains a bargain purchase option.  
     [0057] True Lease are leases in which there is no equity built up by the customer in the equipment. In general, if there is equity built up, then the customer may be buying the equipment, as opposed to leasing it. If the agreement or contract is structured such that the customer is buying the equipment, then the lessor does not get to declare the depreciation of the equipment. If the lease is a true lease, then the financing company will not own the equipment for book purposes, but will be the owner for tax purposes. For example, under a true lease, the financing company would be able to declare accelerated depreciation for Federal and State income tax purposes. However, this would not affect the determination of the state&#39;s sales tax since each state&#39;s sales tax rules are independent of the income tax rules.  
     [0058] Lease Purchase: Under a lease purchase, the financing company purchases the equipment and sells to the lessee via a lease purchase. The customer builds up equity in the equipment during the course of the lease. The customer may have a bargain option for the purchase of the equipment at the end of the lease and have accumulated equity in the equipment at that time. Therefore, the lessee may normally take the depreciation in the equipment.  
     [0059] Installment Sales Contract: Under an installment sales contract, the financing company buys the contract, not the equipment. Thus, the customer and the dealer are responsible for the sales and/or use taxes.  
     [0060] In one embodiment the controller  208  is adapted to determine if the transaction is an operating lease as a function of the country, the set of parameters, and the set of predetermined rules, and to responsively classify the transaction as an operating lease.  
     [0061] If the transaction is not an operating lease, the controller  206  is adapted to determine if the transaction is a true lease as a function of the country, the set of parameters, and the set of predetermined rules, and responsively classify the transaction as a true lease.  
     [0062] In another embodiment, the controller  208  is adapted to further classify the transaction according to internal or user requirements, based on, for example, US tax rules. The additional classifications may be used for additional tax, financial, or internal reporting.  
     [0063] If the transaction is not a true lease, the controller  208  is adapted to determine if the transaction is a lease purchase as a function of the country, the set of parameters, and the set of predetermined rules, and responsively classify the transaction as a lease purchase.  
     [0064] In one aspect of the present invention, the set of parameters may include an option value, a term associated with the transaction, and a value associated with the item at the end of the term. The controller  208  is adapted to compare the option value with the value associated with the item at the end of the term.  
     [0065] In one embodiment, the value associated with the item at the end of the term is a fair market value and the transaction is a true lease if the option value is greater than the fair market value.  
     [0066] In another embodiment of the present invention, the value associated with the item at the end of the term is a value option (VO) and the transaction is not a true lease if the option value is not greater than the fair market value.  
     [0067] In still another embodiment of the present invention, the value associated with the item at the end of the term is a residual value and the transaction is not an operating lease if the option value is less than a predetermined percentage of the residual value.  
     [0068] In another aspect of the present invention, the set of parameters includes an economic life of the item and a term associated with the transaction. The transaction is not an operating lease if the term is equal or greater than a percentage, e.g., seventy-five percent, of the economic life of the item.  
     [0069] In another aspect of the present invention, the set of parameters includes a net present value of minimum lease payments and a cost of the item. The controller is adapted to compare the net present value with the cost of the item. In one embodiment, the transaction is not an operating lease if the net present value of the minimum lease payments is greater or equal to ninety percent (90%) of the cost of the item.  
     [0070] In another aspect of the present invention, the set of parameters includes a residual value and an original equipment cost. The controller  208  is adapted to compare the residual value to the original equipment cost. In one embodiment of the present invention, the transaction is not a true lease if the residual value is less than a predetermined percentage of the original equipment cost.  
     [0071] In another aspect of the present invention, the set of parameters includes an option amount and a residual value. The controller  208  is adapted to compare the option amount and the residual value. In one embodiment, the transaction may not be a lease purchase requirement if the option amount is greater or equal to a fixed percentage of the residual value.  
     [0072] With reference to FIG. 3, in one embodiment, a computer program product  300  may classify a financial transaction in an automated or automatic manner. The computer program product  300  includes computer readable program code means  302  for establishing a country associated with the financial transaction, computer readable program code means  304  for establishing a set of parameters associated with the financial transaction, and computer readable program code means  306  for classifying the financial transaction as a function of the country, the set of parameters, and a set of predetermined rules. The set of parameters and set of predetermined rules may be user specified (see below).  
     [0073] With reference to FIG. 4, in another embodiment, a computer program product  400  may classify a financial transaction for an item. The computer program product  400  includes computer readable program code means  402  for establishing a set of parameters associated with the transaction. The set of parameters including a term having an end and being associated with the transaction, an economic life of the item, a payment amount and a frequency of payment, a value associated with the item at the end of the term, and a rate related to the transaction. The computer program product  400  may also include computer readable program code means  404  for classifying the transaction as a function of the set of parameters.  
     [0074] With reference to FIG. 5, a computer based method  500 , according to one embodiment of the present invention, classifies a financial transaction for an item. In a first process block  502 , a country associated with the financial transaction is established. In a second process block  504 , a set of parameters associated with the financial transaction is established. As discussed above, the country and the set of parameters may be input by the user  210  or read from the data file  214  which is received from another computer system  222 . In a third process block  506 , the financial transaction is classified as a function of the country, the set of parameters, and a set of predetermined rules.  
     [0075] With reference to FIG. 6, a computer based method  600 , according to another embodiment of the present invention, classifies a financial transaction for an item. In a fourth process block  602 , a set of parameters associated with the transaction is established. The set of parameters may include a term having an end and being associated with the transaction, an economic life of the item, a payment amount and a frequency of payment, a value associated with the item at the end of the term, and a rate related to the transaction. In a fifth process block  604 , the transaction is classified as a function of set of parameters.  
     [0076] In one embodiment, the transaction is classified as one of an operating lease, a true lease, a lease purchase, an installment sales contract, or a promissory note. With reference to FIG. 7, in one embodiment, the step of classifying the transaction includes several sub-steps. In a first decision block  702 , the method  500 ,  600  determines if the transaction is an operating lease. If yes, then the financial transaction is classified as an operating lease in a sixth process block  704 . In a second decision block  706 , if the transaction is not an operating lease, the method  500 ,  600  determines if the transaction is a true lease. If yes, then the financial transaction is classified as a true lease in a seventh process block  708 .  
     [0077] In a third decision block  710 , if the transaction is not a true lease, then the method  500 ,  600  determines if the transaction is a lease purchase. If yes, then the transaction is classified as a lease purchase in an eighth process block  712 . In a fourth decision block  714  if the transaction is an installment sales contract, then the transaction is classified as an installment sales contract in a ninth process block  716 . In a fifth decision block  718  if the transaction is a promissory note, then the transaction is classified as a promissory note in a tenth process block  720 . Otherwise, an error message is transmitted to the use  210  in eleventh process block  722 .  
     [0078] With reference to FIGS.  2 , and  8 - 19 B, in another aspect of the present invention, an authorized user  220  is allowed to define and modify the set of parameters for a specific country. In another aspect of the present invention, the present invention allows the authorized user  220  to define and/or modify the predetermined rules as a function of the set of parameters.  
     [0079] Returning to FIG. 2, the system  200  includes a second graphic user interface (GUI)  218 . The second graphic user interface  218  is utilized by the authorized user  220 . In one embodiment, the first and second GUI  212 ,  218  may be combined into a single GUI.  
     [0080] With specific reference to FIG. 8, the second GUI includes a login screen  800 . The login screen  800  includes a user ID text entry box  802 , a password entry box  804 , and an environment drop down list  806 . The authorized user  220  enters their ID and password in the entry boxes  802 ,  804  and selects the appropriate environment based on the type of user. For example, in the illustrated embodiment, the authorized user  220  selects from a development, test, and production environment. Access to the various environments is based on the rights of the authorized user  220 . The login screen  800  also includes an OK button  808  and a CANCEL button  810 . After the authorized user  220  enters their information and selects an appropriate environment, the authorized user  220  may select the OK button  808  to gain entry to the system  200 .  
     [0081] With reference to FIG. 9, once the authorized user  220  has gained entry, a Financial Classification Process (FCP) screen  902  is displayed by the graphical user interface  218 . The FCP screen  902  includes a plurality of tabs  904 . In the illustrated embodiment, the plurality of tabs includes a Countries tab  904 A, a Lease Types tab  904 B, a Program Types tab  904 C, a Decision Fields tab  904 D, a Formulas tab  904 E, a User Ids tab  904 F, an Access Groups tab  904 G, a Lease Rules tab  904 H, a Program Rules tab  9041 , a Classification tab  904 J, and an Error Messages tab  904 K. The selection of a tab by the authorized user is restricted based on his/her access level.  
     [0082] Selection of one of the tabs  904 A- 904 K displays a corresponding panel in the FCP screen  902  (see below). The purpose of each panel will be described below. The panels displayed upon selection of the Countries tab  902 A, Access Groups tab  904 G, and Error Messages tab  904 K are used for maintenance. The panel displayed upon selection of the Classification tab  904 J is used during testing or by users whose systems are not tied to other systems and must enter data manually (see below).. The other panels are used to define and modify the set of parameters and the rules used by the system  200  and the method  500 ,  600 . Furthermore, the selection of a tab by the authorized user  220  may be restricted based on the authorized user&#39;s access level.  
     [0083] With specific reference to FIG. 10, upon selection of the Countries tab  904 A, a Countries panel  1002  is displayed in the FCP screen  902 . The Countries panel  1002  includes a Country Code drop down list  1004  and a Country Name text entry box  1006 . The Countries panel  1002  also includes a New button  1008 , a Save button  1010 , a Delete button  1012 , and a Cancel button  1014 . The Countries panel  1002  is used by the authorized user  220  to add and/or modify the countries defined within the system  200  and method  500 ,  600 . The authorized user  220  may enter or modify data pertaining to a country in the Country Code drop down list  1004  and Country Name text entry box  1006 . The new or modified country data can be added or saved to the database  202  by actuation of the Save button  1010 . Actuation of the New button  1008  results in the Country Code drop down list  1004  being replaced with an entry box. The authorized user  220  may enter a new country code with the entry box. Actuation of the Delete button  1012  results in a selected country being deleted from the database  202 . Actuation of the Cancel button  1014  clears the Country Code drop down list  1004  and the Country Name text entry box  1006 .  
     [0084] With specific reference to FIG. 11, upon selection of the Lease Types tab  904 B, a Lease Types panel  1102  is displayed in the FCP screen  902 . The Lease Types panel  1102  includes a Lease Code drop down list  1104 , a Lease Priority entry box  1106  and a Description text entry box  1108 . The Lease Types panel  1102  also includes a New button  1110 , a Save button  1112 , a Delete button  1114 , and a Cancel button  1116 . The Lease Types panel  1002  is used by the authorized user  220  to add and/or modify the lease types defined within the system  200  and method  500 ,  600 . The authorized user  220  may enter or modify data pertaining to a lease type in the Lease Code drop down list  1104 , Lease Priority text entry box  1106  and the Description text entry box  1108 . The new or modified lease type data can be added or saved to the database  202  by actuation of the Save button  1112 . Actuation of the New button  1110  results in the Lease Code drop down list  1104  being replaced with an entry box. The authorized user  220  may enter a new lease type code in the entry box. Actuation of the Delete button  1114  results in a selected lease type being deleted from the database  202 . Actuation of the Cancel button  1114  clears the Lease Code drop down list  1104  and the Description text entry box  1106 .  
     [0085] With specific reference to FIG. 12, upon selection of the Program Types tab  904 C, a Program Types panel  1202  is displayed in the FCP screen  902 . The Program Types panel  1202  includes a Lease Code drop down list  1204 , a Program Code drop down list  1206 , and a Description text entry box  1208 . The Program Types panel  1202  is used to define Program Types for the lease types defined in the Lease Types panel  1102 . Program Types are sub-types of leases. The Program Types panel  1202  also includes a New button  1210 , a Save button  1212 , a Delete button  1214 , and a Cancel button  1216 . The Program Types panel  1202  is used by the authorized user  220  to add and/or modify the program types defined within the system  200  and method  500 ,  600 . The authorized user  220  may enter or modify data pertaining to a program type in the Program Type drop down list  1206  and the Description text entry box  1208 . The new or modified program type data can be added or saved to the database  202  by actuation of the Save button  1212 . Actuation of the New button  1210  results in the Program Code drop down list  1206  being replaced with an entry box. The authorized user  220  may enter a new program code in the entry box. Actuation of the Delete button  1214  results in a selected program type code being deleted from the database  202 . Actuation of the Cancel button  1014  clears the Lease Code drop down list  1204 , the Program Code drop down list  1206 , and the Description text entry box  1206 .  
     [0086] With specific reference to FIG. 13, upon selection of the Decision Fields tab  904 D, a Decision Fields panel  1302  is displayed in the FCP screen  902 . The Decision Fields panel  1302  includes a Field Name drop down list  1304  and a Description text entry field  1306 . The Decision Fields panel  1302  also includes a plurality of parameter check boxes  1308  which are used to define the decisions fields. In the illustrated embodiment, the plurality of parameter check boxes includes a computed check box  1308 A, a non-computed check box  1308 B, an active check box  1308 C, an inactive check box  1308 D, a single-value check box  1308 E, a multi-value check box  1308 F, an alphanumeric check box  1308 G, and a numeric check box  1308 H.  
     [0087] The Decision Fields panel  1302  also includes a New button  1310 , a Save button  1312 , a Delete button  1314 , and a Cancel button  1316 . The Decision Fields panel  1302  is used by the authorized user  220  to add and/or modify the fields which will be used within the rules defined within the system  200  and method  500 ,  600  (see below). The authorized user  220  may enter or modify data pertaining to a decision field in the field name drop down list  1304  and the Description text entry box  1308 . The new or modified decision field can be added or saved to the database  202  by actuation of the Save button  1312 . Actuation of the New button  1310  results in the Decision Fields drop down list  1306  being replaced with an entry box. The authorized user  220  may enter a new decision field name in the entry box. Actuation of the Delete button  1314  results in a selected decision field being deleted from the database  202 . Actuation of the Cancel button  1314  clears the Decision Field drop down list  1304 , the Description text entry box  1206 , and the check boxes  1308 .  
     [0088] The Computed and Non-Computed check boxes  1308 A,  1308 B are mutually exclusive and define whether the defined field is computed via or a formula or a given value or values. The Active and Inactive checkboxes  1308 C,  1308 D are mutually exclusive and define whether the defined field is active or inactive.  
     [0089] The Single-Value and Multi-Value check boxes  1308 E,  1308 F are active only if the Non-Computed check box  1308 B is selected and define whether there is a single value or multiple values associated with the defined field.  
     [0090] The Alphanumeric and Numeric check boxes  1308 G,  1308 H are active only if the Non-Computed check box  1308 B is selected and define whether the field can contain any alphanumeric character or only numerals.  
     [0091] With specific reference to FIG. 14, upon selection of the Formulas tab  904 E, a Formulas panel  1402  is displayed in the FCP screen  902 . The Formulas panel  1402  allows the authorized user  220  to define the formulas for those field names indicated as computed fields on the Decision Fields panel  1302 . The Formulas panel  1402  includes a Field Name drop down list  1404 , a Formula text entry box  1406 , and a Description text entry box  1408 . The Field Name drop down list  1404  is populated with those fields which are designated as computed and numeric in the Decision Fields panel  1302 . In order to define the formula for a defined field, the authorized user  220  selects the desired field in the Field Name drop down list  1404  and adds a description in the Description text entry box  1408 . The formula for the selected field is entered in the Formula text entry box and may include defined fields and one or more mathematical operators. In one embodiment, the mathematical operators available include addition, subtraction, multiplication, division and parentheses and brackets.  
     [0092] The Formulas panel  1402  includes a Formula List  1410 , a List of Operands  1412  and a Keypad  1414  for entering and modifying formulas.  
     [0093] Once a Field Name is selected in the Field Name drop down list  1404 , if a formula has already been defined, the formula is displayed in the Formula List  1410 . If a formula has not been defined, the Formula List will remain blank. Using the List of Operands  1412  and the Keypad  1414 , the formula for the selected Field Name may be defined or modified. Numbers (i.e., constants) and mathematical operators are entered using the keypad  1406 . The List of Operands  1412  is populated with those fields defined as non-computed and numeric in the Decision Fields panel  1302 . In one embodiment, these fields may be added to the current formula by “double-clicking” on their name in the List of Operands  1412 .  
     [0094] In one embodiment, operation of the Formulas panel  1402  and the formulas follow a set of predetermined rules. For example, after a Field Name has been added to the formula, a mathematical operator must be added via the keypad  1406 . Additionally, formulas are followed using the following precedence: brackets over division, multiplication, addition, and subtraction (BDMAS).  
     [0095] The Formulas panel  1402  also includes a New button  1416 , a Save button  1418 , a Previous button  1420 , a Cancel button  1422 , and a Next button  1422 . The Previous and Next Buttons  1420 ,  1424  are used to navigate up and down the list of defined fields. The New Button  1416  clears the Field Name drop down list  1404 , the Formula text entry box  1406 , and the Description text entry box  1408 . The Save button  1418  saves an entered formula in the database  202 .  
     [0096] With reference to FIG. 15, upon selection of the User Ids tab  904 F, a User Ids panel  1502  is displayed. The User Ids panel  1502  is used to create and modify User Ids for users or authorized users of the system  200  and method  500 ,  600 . The User Ids panel  1502  includes a Country drop down list  1504 , a User Id drop down list  1506 , a Password text entry box  1508 , a Confirm Password text entry box  1510 , and an Access Group drop down list  1512 . The User Ids panel  1502  also includes a New button  1514 , a Save button  1516 , a Delete button  1518 , a Cancel button  1520 , a Previous button  1522 , and a Next button  1524 .  
     [0097] With reference to FIG. 16, upon selection of the Access Groups tab  904 G, an Access Groups panel  1602  is displayed. The Access Groups panel  1602  is used to define Access Groups. Users may be defined as being a member of an Access Group for purposes of access to the system  200  and the method  500 ,  600 . The Access Groups panel  1602  includes an Access Group drop down list  1604 , an Access Level text entry box  1606 , and a Screen Name drop down list  1608 . The Access Groups panel  1602  also includes a New button  1610 , a Save button  1612 , a Delete button  1614 , a Cancel button  1616 , a Previous button  1618 , and a Next button  1620 . The User Ids panel  1502  and the Access Groups panel  1602  are used to define and modify authorized users and the define their level of access to the system  200 .  
     [0098] With reference to FIG. 17, upon selection of the Error Messages tab  904 K an Error Messages panel  1702  is displayed in the FCP screen  902 . The Error Messages panel  1702  is used to define error messages which may be displayed during operation of the system  200  and method  500 ,  600 . In one aspect of the present invention, the error message contain the reason or reasons a transaction does not fit a classification. The Error Messages panel  1702  includes an Error Code drop down list  1704  and an Error Message text entry box  1706 . The Error Messages panel  1702  also includes a New button  1708 , a Save button  1710 , a Delete button  1712 , and a Cancel button  1714 . Selection of the New button  1708  causes the Error Code drop down list  1704  to be changed to a text entry box for entry of a new code. Selection of the Save button  1708  saves a newly entered or modified error code and description in the database  202 . Selection of the Delete button  1712  deletes the selected error code from the database  202 . Selection of the Cancel button  1714  resets the Error Messages panel  1702 .  
     [0099] With reference to FIGS. 18A and 18B, upon actuation of the Lease Rules Tab  904 H, a Lease Rules panel  1802  is displayed in the FCP screen  902 . The Lease Rules Panel  1802  is used by the authorized user  220  to define the rules associated with each lease type previously defined.  
     [0100] In the illustrated embodiment, the Lease Rules panel  1802  includes a Lease Code drop down list  1804 , an Error Code drop down list  1806 , an Effective Date entry box  1808 , and an Inactive Date entry box  1810 . The Lease Rules panel  1802  also includes an entry box  1812  for entry of a rule (see below). The Lease Rules panel  1802  further includes a Class Counter  1814 , a New Class button  1816 , a Save button  1818 , an Inactivate button  1820 , and a Cancel button  1822 . The Lease Rules panel  1802  also includes a Rule Counter  1824 , a New Rule button  1826 , a Previous button  1828 , and a Next button  1830 .  
     [0101] In the illustrated embodiment, the Lease Rules panel  1802  allows the authorized user to organize the rules for a given lease code into classes. The New Class button  1816 , Save button  1818 , Inactivate button  1820 , Cancel button  1822 , New Rule button  1826 , Previous button  1828 , and Next button  1830  allow the authorized user  220  to manipulate the sequences, rules and classes listed in the entry box  1812  (see below). The class and rule descriptors  1814 ,  1824  are used as indicators to the authorized user  220 .  
     [0102] The entry box  1812  includes a Select Field Name 1 drop down list  1832 , an Operator drop down list  1834 , a Value 1 entry box  1836 , a Value 2 entry box  1838 , and a Select Field Name 2 drop down list  1840 . The Select Field Name 1 drop down list  1832 , the Operator drop down list  1834 , the Value 1 entry box  1836 , the Value 2 entry box  1838 , and the Select Field Name 2 drop down list  1840  are used to define each rule. However it should be noted that not each of these is required for each rule. For example, a particular rule may be based on a single field and a single value.  
     [0103] More than one rule may be defined for each lease code. In one embodiment, rules are composed of sequences which are connected by an “AND” operator. Rules are grouped together into classes by “OR” operators. Furthermore, classes may be grouped together using “AND” operators.  
     [0104] Examples of several sequences which may be defined for an Operating Lease are illustrated in FIG. 18B. Each line in the entry box  1812  defines a sequence. In the illustrated example, first, second, third and fourth sequences are defined in first, second, third, and fourth lines  1842 ,  1844 ,  1846 ,  1848 , respectively. In the first, second, third, and fourth lines  1842 ,  1844 ,  1846 , and  1848 , the following sequences are defined:  
     [0105] first line  1842 : FIXEDPAYMENTAMOUNT&gt;TOTALPAYMENTS  
     [0106] second line  1844 : ADVANCEDPAYMENTAMOUNT BETWEEN 100 AND 1000  
     [0107] third line  1846 : EQUIPMENTTYPE ALL=engine  
     [0108] fourth line  1848 : PAYMENT DATE, NONE=Feb. 28, 2002  
     [0109] The first, second, third and fourth sequences are linked by AND operators into a single rule. In the illustrated embodiment, each of these sequences must be met in order for a particular transaction to be classified as an Operating Lease.  
     [0110] With reference to FIGS. 19A and 19B, upon actuation of the Program Rules Tab  904 I, a Program Rules panel  1902  is displayed in the FCP screen  902 . The Program Rules Panel  1902  is used by the authorized user  220  to define the rules associated with each program type (for each lease type) previously defined.  
     [0111] In the illustrated embodiment, the Program Rules panel  1902  includes a Lease Code drop down list  1904 , a Program Code drop down list  1906 , an Effective Date entry box  1908 , and an Inactive Date entry box  1910 . The Program Rules panel  1902  also includes an entry box  1912  for entry of a rule (see below). The Program Rules panel  1902  further includes a Class Counter  1914 , a New Class button  1916 , a Save button  1918 , an Inactivate button  1920 , and a Cancel button  1922 . The Program Rules panel  1902  also includes a Rule Counter  1924 , a New Rule button  1926 , a Previous button  1928 , and a Next button  1930 .  
     [0112] In the illustrated embodiment, the Program Rules panel  1902  allows the authorized user  220  to organize the rules for a given program code into classes. The New Class button  1916 , Save button  1918 , Inactivate button  1920 , Cancel button  1922 , New Rule button  1926 , Previous button  1928 , and Next button  1930  allow the authorized user  220  to manipulate the classes and rules listed in the entry box  1912  (see below). The class and rule counters  1914 ,  1924  are used as indicators to the authorized user  220 . Each program type is linked to a lease type.  
     [0113] The entry box  1912  includes a Select Field Name 1 drop down list  1932 , an Operator drop down list  1934 , a Value 1 entry box  1936 , a Value 2 entry box  1938 , and a Select Field Name 2 drop down list  1940 . The Select Field Name 1 drop down list  1932 , the Operator drop down list  1934 , the Value 1 entry box  1936 , the Value 2 entry box  1938 , and the Select Field Name 2 drop down list  1940  are used to define each rule. However it should be noted that not each of these are required for each rule. For example, a particular rule may be based on a single field and a single value.  
     [0114] More than one rule may be defined for each program code. In one embodiment, rules are composed of sequences which are connected by an “AND” operator. Rules are grouped together into classes by “OR” operators. Furthermore, classes may be grouped together using “AND” operators.  
     [0115] Example of several sequences which may be defined for a program code of “01” under the lease type Operating Lease are illustrated in FIG. 19B. First and second sequences are defined in first and second lines  1942 ,  1944 , respectively. In the first and second lines  1942 ,  1944 , the following sequences are defined:  
     [0116] first line  1942 : PAYMENTDATE ANYONE=Apr. 4, 2002  
     [0117] second line  1944 : APRRATE&gt;=36  
     [0118] The first and second sequences are linked by an AND operator into a single rule. In the illustrated embodiment, each of these sequences or conditions must be met in order for a particular transaction to be classified under Program Code 01 as an Operating Lease.  
     [0119] With reference to FIGS. 20A and 20B in another aspect of the present invention, a Classification Screen  2002  allows a user  210 ,  220  to directly enter the information required by the defined rules to classify a transaction. The Classification Screen  2002  may be provided to the user  210  for classifying actual transactions or to the authorized user  220  for testing of the defined rules. As such, the Classification Screen  2002  may be provided via the GUI  212 , the second GUI  218 , both GUIs or a combined GUI.  
     [0120] In the illustrated embodiment, the Classification Screen  2002  includes a Quote Number text box  2004  and an Input Table  2006 . The Input Table  2006  includes a Questions column  2008  and a Values column  2010 . The Classification Screen  2002  also includes an Information Section  2012 , a Classify button  2014  and a Clear button  2016 .  
     [0121] Each row of the Input Tale  2006  includes a single field or question for which input data is required. In each row, the Questions column  2008  includes the name of the Field for which a value or values are required. The user  210 ,  220  inputs the required data into Values column  2010  of the corresponding row. The Information Section  2012  provides an indication of the type of data required for a selected question or row of the input table  2006 . In the illustrated embodiment, the type of data may be either a single value or multiple values and either numeric or alphanumeric.  
     [0122] In the illustrated embodiment, two required fields are shown: PAYMENT DATE and ADVANCE ARREARS. With specific reference to FIG. 20B, sample data of “Mar. 29, 2002” and “AR” are shown.  
     [0123] Industrial Applicability  
     [0124] With specific reference to the Figs., the present invention provides a system  200  and method  500 ,  600  for classifying a financial transaction. The system  200  and method  500 ,  600 , in practice, may be part of a sale or lease transaction for, e.g., equipment or services. The customer (purchaser or lessee) interacts with an employee (sales agent) of a dealer, a financing company or the manufacturer.  
     [0125] As described above, there are generally four steps to the transaction: the quoting process, the credit process, the document preparation process, and the classification process. In the quoting process, the customer and the sales agent discuss the type and number of equipment, the type of contract, and the maximum size payment the client desires. After these are determined, the agent performs a credit check on the customer to determine whether or not to extend the desired credit to the customer. Past customer conduct with respect to payment history to the financing company may also be considered. After the credit process, the transaction documents need to be prepared. This may be done automatically using an auto-packaging computer application for generating a list of the required documents using information gathered during the quoting process and the credit process and a remote docs computer application (not shown) for preparing the documents. Alternatively, the required documents could be manually assembled.  
     [0126] Using the information provided during the above described process, the present invention is used to automatically classify the transaction for tax and reporting purposes. The present invention allows authorized users access to the system to define and modify the rules used to classify transactions by the system  200  or method  500 ,  600 . In operation, the system  200  or method  500 ,  600  may be utilized at different steps in the transaction process. For example, a user who has access to the system  200  during one of the initial steps of the transaction process, i.e., the quoting process, the credit process, the document preparation process, may provide an initial classification for the transaction. During the classification stage, the initial classification may be either accepted or denied based on the defined rules. If denied, the actual or true classification is determined by the rules. Alternatively, the transaction may be classified simply by the rules during the classification phase.  
     [0127] The classification of the transaction may be used for both tax determination and reporting requirements. The system  200  and method  500 ,  600  of the present invention may be part of a system used in the overall process above or a part of a separate system which is linked to other systems.  
     [0128] Other aspect and features of the present invention can be obtained from a study of the drawings, the disclosure, and the appended claims.