Version: 2.0 | Status: Ready for Stakeholder Review | Last Updated: 2026-01-15
Change Log
| Version | Date | Author | Changes |
|---|
| 2.0 | 2026-01-15 | PRD Conversion | Converted to business-focused format per checklist |
| 1.0 | 2025-12-01 | Initial Draft | Original technical specification |
1. Executive Summary
1.1 Purpose
Enable fleet operators to track vehicle acquisition costs (purchase, lease, rental) with automated payment tracking and complete financial visibility.
1.2 Problem Statement
Fleet operators lose money and time due to:
- Manual payment tracking causes missed lease expenses and incorrect financial reporting
- No centralized acquisition records makes it impossible to calculate true cost of ownership
- Backdated contracts require hours of manual retroactive payment entry
- Disconnected systems prevent accurate vehicle profitability analysis
1.3 Business Value
| Outcome | Metric | Target |
|---|
| Eliminate missed payments | Percentage of lease/rent payments automatically captured | 100% |
| Reduce manual data entry | Hours saved per month on payment tracking | 8-12 hours |
| Improve financial accuracy | Reduction in acquisition cost discrepancies | 95% fewer errors |
| Enable cost visibility | Vehicles with complete acquisition cost tracking | 100% coverage |
| Accelerate backdated contracts | Time to enter retroactive payments | <1 minute vs 30+ minutes manual |
1.4 Target Users
| Role | Primary Need | Business Impact |
|---|
| Fleet Managers | Track acquisition strategy across fleet | Optimize purchase vs lease decisions |
| Finance Teams | Accurate expense records and forecasting | Month-end close accuracy, audit readiness |
| Operations Staff | Record agreements and documentation | Maintain compliance, reduce errors |
1.5 Scope
In Scope:
- Three acquisition types: Purchase (one-time), Lease (financial), Rental (operational)
- Automated monthly payment generation for recurring agreements
- Retroactive payment calculation for backdated contracts
- Contract lifecycle management (start, pause, resume, expire)
- Document attachment for agreements
- Integration with vehicle economics and balance tracking
Out of Scope:
- Depreciation calculations
- Payment notifications/reminders
- Multi-currency support
- Accounting system integration
- Lease buyout calculations
- Early termination management
2. Success Metrics
| Metric | Definition | Baseline | Target | Measurement Method | Timeframe |
|---|
| Payment Capture Rate | % of recurring payments auto-generated | 0% (manual) | 100% | Compare expected vs actual balance entries | 3 months |
| Data Entry Time | Hours spent manually recording acquisition costs | ~15 hrs/month (estimate) | <3 hrs/month | Time tracking survey of finance teams | 6 months |
| Financial Accuracy | % of vehicles with correct acquisition cost totals | ~70% (estimate) | 99% | Quarterly audit reconciliation | 6 months |
| Retroactive Processing | Time to enter backdated contract with payments | ~30 min/contract | <1 min | System timestamp comparison | 3 months |
| Fleet Coverage | % of vehicles with acquisition records | ~50% (estimate) | 95% | Vehicle count with active purchase record | 6 months |
| Contract Compliance | % of agreements with attached documentation | ~60% (estimate) | 90% | File attachment audit | 6 months |
Baseline Collection:
- Pre-implementation survey of finance teams for manual effort estimates
- Audit sample of 50 vehicles for current acquisition record completeness
- Analysis of vehicle balance entries for payment accuracy
3. User Stories
P0 - Must Have
| ID | User Story | Acceptance Criteria |
|---|
| US-01 | As a Fleet Manager, I want to record a vehicle purchase so the acquisition cost appears in vehicle economics | GIVEN a vehicle exists, WHEN I create a purchase record with amount, THEN the expense appears in vehicle balance within 5 seconds |
| US-02 | As a Finance Team member, I want lease payments to automatically generate monthly expenses so I don’t have to enter them manually | GIVEN an active lease with due date = 15th, WHEN the 15th arrives, THEN a balance entry is created with the correct amount |
| US-03 | As a Fleet Manager, I want to create backdated agreements with automatic retroactive payments so historical records are complete | GIVEN a lease starting 3 months ago, WHEN I create it with retroactive flag, THEN 3 monthly payment entries are created instantly |
| US-04 | As an Operator, I want to upload purchase documentation so agreements are stored with the vehicle | GIVEN a purchase record, WHEN I attach a file, THEN the file is linked to the record and all generated payment entries |
P1 - Should Have
| ID | User Story | Acceptance Criteria |
|---|
| US-05 | As a Fleet Manager, I want to pause a lease during vehicle downtime so payments stop until resumed | GIVEN an active lease, WHEN I pause it, THEN no payments generate until I resume it |
| US-06 | As a Finance Team member, I want to set different first-month payments (down payments) so initial costs are tracked separately | GIVEN a lease with initial payment of $1000 and regular payment of $500, WHEN payments generate, THEN first is $1000 and subsequent are $500 |
| US-07 | As a Fleet Manager, I want agreements to automatically expire at end date so no payments generate for ended contracts | GIVEN a lease ending Jan 10, WHEN Jan 11 arrives, THEN the contract is marked inactive and no future payments generate |
| US-08 | As a Finance Team member, I want to see total acquisition cost per vehicle including all payments to date | GIVEN a vehicle with 12 months of lease payments, WHEN I view vehicle economics, THEN I see the sum of all acquisition-related expenses |
P2 - Nice to Have
| ID | User Story | Acceptance Criteria |
|---|
| US-09 | As a Fleet Manager, I want to track included kilometers and overage costs per lease so I can monitor compliance | GIVEN a lease with 30,000 km included, WHEN I enter overage cost per km, THEN this data is stored for reporting |
| US-10 | As a Finance Team member, I want to distinguish purchase vs lease vs rental in reports so I can analyze acquisition strategy | GIVEN multiple vehicles with different acquisition types, WHEN I filter expenses by category, THEN I see separate totals for each type |
| US-11 | As a Fleet Manager, I want to track security deposits separately so refundable amounts are not counted as expenses | GIVEN a lease with security deposit, WHEN recorded, THEN the deposit is tracked separately from regular payments |
4. Functional Requirements
4.1 Acquisition Type Management
| Requirement | Business Outcome |
|---|
| FR-01: Support three acquisition types (Purchase, Lease, Rental) | Finance teams can categorize and report on acquisition strategy |
| FR-02: Purchase type creates single expense entry immediately | One-time costs reflected in vehicle economics instantly |
| FR-03: Lease and Rental types generate recurring monthly expenses | Eliminate manual payment entry for recurring agreements |
| FR-04: Each vehicle has only one active acquisition record | Prevent duplicate payments and conflicting records |
4.2 Payment Automation
| Requirement | Business Outcome |
|---|
| FR-05: Generate payments automatically on configured due date each month | 100% payment capture without manual intervention |
| FR-06: Support different first payment amount (down payment) | Accurate tracking of variable initial costs |
| FR-07: Handle months with fewer days than due date (e.g., Feb 28 for due date 31) | No missed payments due to calendar variations |
| FR-08: Prevent duplicate payments for same month | Financial accuracy and auditability |
| FR-09: Stop payments automatically when contract end date passes | No erroneous post-contract expenses |
4.3 Retroactive Processing
| Requirement | Business Outcome |
|---|
| FR-10: Calculate and create all historical payments for backdated contracts | Instant retroactive entry vs hours of manual work |
| FR-11: Apply first-payment amount to first retroactive entry when applicable | Accurate historical records including down payments |
| FR-12: Create all retroactive entries in single transaction | Data consistency and rollback capability |
4.4 Contract Lifecycle
| Requirement | Business Outcome |
|---|
| FR-13: Pause and resume contracts without losing configuration | Handle vehicle downtime without losing agreement terms |
| FR-14: Preserve records of expired/superseded contracts | Complete audit trail for compliance |
| FR-15: Support contract updates (price changes, term modifications) | Reflect renegotiated terms without recreating agreements |
4.5 Documentation & Integration
| Requirement | Business Outcome |
|---|
| FR-16: Attach agreement files to purchase records | Single source of truth for contract documentation |
| FR-17: Link all generated payments back to originating agreement | Traceability for audit and reconciliation |
| FR-18: Include acquisition costs in vehicle profitability calculations | Accurate total cost of ownership analysis |
5. Business Rules
| Rule | Description | Business Rationale |
|---|
| BR-01 | One active acquisition per vehicle | Prevents duplicate payments and data inconsistency |
| BR-02 | New acquisition supersedes previous (soft delete) | Maintains audit trail while ensuring single source of truth |
| BR-03 | Paused contracts do not backfill missed payments when resumed | Prevents unexpected bulk expenses; pause means no charges |
| BR-04 | Payment due date 31 uses last day of short months | Ensures predictable monthly payment timing |
| BR-05 | Retroactive payments only for Lease and Rental types | Purchases are one-time by definition |
| BR-06 | Contract expiration is automatic and irreversible | Prevents accidental charges beyond agreement terms |
6. Acceptance Criteria
AC-01: Purchase Recording
- GIVEN a vehicle with no acquisition record
- WHEN admin creates purchase record with $50,000 amount
- THEN expense entry of $50,000 appears in vehicle balance within 5 seconds
- AND purchase record shows as active
AC-02: Monthly Payment Generation
- GIVEN lease with due date = 15th, monthly amount = $500
- WHEN system processes on January 15
- THEN expense entry of $500 is created dated January 15
- AND entry is linked to originating lease record
AC-03: Different First Payment
- GIVEN lease with initial payment = $1,000, regular payment = $500
- WHEN first payment generates
- THEN amount is $1,000
- WHEN second payment generates
- THEN amount is $500
AC-04: Retroactive Payments
- GIVEN lease starting October 15, 2025 with due date = 15, regular = $500, initial = $1,000
- WHEN created on January 20, 2026 with retroactive flag
- THEN 4 expense entries created: Oct 15 ($1,000), Nov 15 ($500), Dec 15 ($500), Jan 15 ($500)
AC-05: Contract Pause
- GIVEN active lease with due date = 15
- WHEN admin pauses contract on January 5
- AND system processes on January 15
- THEN no payment is generated
- WHEN admin resumes on February 10
- AND system processes on February 15
- THEN February payment is generated (January is not backfilled)
AC-06: Contract Expiration
- GIVEN lease ending January 10
- WHEN system processes on January 11
- THEN contract marked inactive
- AND no future payments generated
7. Dependencies
Upstream Dependencies
| System | Dependency Type | Impact if Unavailable |
|---|
| Vehicle Management | Required | Cannot create acquisition records |
| Tenant Settings | Required | Cannot determine timezone for payment scheduling |
Downstream Dependencies
| System | Integration | Impact |
|---|
| Vehicle Balance | Expense entries | Acquisition costs appear in vehicle economics |
| Fleet Reports | Data aggregation | Cost of ownership calculations |
8. Non-Functional Requirements
| Requirement | Target | Measurement |
|---|
| Payment Processing | All monthly payments generated within 10-minute daily window | System logs |
| Data Integrity | Zero duplicate payments per month | Balance entry audit |
| Reliability | 99.9% uptime for payment generation | Monitoring dashboard |
| Error Isolation | Failure in one tenant does not affect others | Error logs |
| Audit Trail | All records preserved with soft delete | Database query verification |
9. Glossary
| Term | Definition |
|---|
| Purchase | One-time vehicle acquisition with immediate expense entry |
| Lease | Financial lease with recurring monthly payments, typically with residual value |
| Rental | Operational lease with recurring monthly payments, no residual value |
| Initial Payment | First payment amount (may differ from regular monthly amount for down payments) |
| Residual Value | Final payment or buyout amount at lease end |
| Retroactive Payments | Historical payment entries auto-generated for backdated contracts |
| Security Deposit | Refundable upfront amount tracked separately from payments |
| Soft Delete | Marking record inactive while preserving for audit trail |
10. Unresolved Questions
- Baseline data availability? Can finance teams provide actual current manual effort hours for comparison?
- Audit frequency? How often will reconciliation audits run to measure accuracy improvements?
- Notification need? Should payment generation failures trigger alerts to finance team?
- Multi-currency priority? How urgent is support for cross-border fleet operations?