Agency Bill (Broker Billed)

From Agency Systems Wiki
Jump to: navigation, search
Ic description black 24dp.png Newton User Guide: Accounting - Invoice/Billing
Related Pages
Related Categories

Agency Bill (Broker Bill) processing is the process of entering Agency Bill invoices, entering broker payments, and then reconciling the policies against the company accounts agency bill statement. The receivable, payable, income and expense values all come from creating the invoice.

Creating the invoice means you will do 3 later transactions:

  • Receipt money from the broker, less their commission.
  • Issue a check to the company less your commission.
  • Issue a check to the sub-producer if commission is included. (Not included in example below.)


Ic info black 24dp.png See Agency Bill for regular personal or commercial retail Agency Bill invoices.


Contents

Agency Bill Invoice Accounting Entries

An Agency Bill invoice for $10,000, with 20% agency commission (GA) and 10% broker commission would result in the following balances:

GL Account Name Debit Credit Action
1120 Accounts Receivable $10,000.00 The broker owes you $10,000.00
1120 Accounts Receivable $1,000.00 Broker Commission reduces receivable.
2110 Company Payable $8,000.00 You owe the company $8,000.00
4110 Agency Bill Income $2,000.00 You have earned $2,000.00
5109 Broker Expense $1,000.00 You have incurred an expense of $1,000.00, with a net income of $1,000.00 ($2,000.00 - $1,000.00)

In most offices, the money owed to the company or producer isn't considered "due" until the agency itself has been paid. Agency Systems can track that for you.

Receipt Money (Cash) From the Broker Accounting Entries

When you enter cash from a broker, the broker balance is credited (reduced) and the bank balance is debited (increased). In our example, the broker balance is currently $9,000. When you get the money, it will alter these accounts:

GL Account Name Debit Credit
1100 Cash in Bank $9,000.00
1120 Accounts Receivable $9,000.00

This sets the balance in the bank to $9,000, and zeros the receivable from the broker.

Company Check Accounting Entries

When its time to pay the company, you will create a check transaction in the system. You may be handwriting checks, but they still need to be created in the system to update your bank account and relieve the payable. The check will credit (reduce) the bank account and zero out the company payable.

GL Account Name Debit Credit
2110 Company Payable $8,000.00
1100 Cash in Bank $8,000.00

Agency Bill Processing - Final Accounting Entries

At the end of all of these transactions, the account balances are:

GL Account Name Debit Credit
1100 Cash in Bank $1,000.00
5109 Broker Expense $1,000.00
1120 Accounts Receivable $0.00
4110 Agency Bill Income $2,000.00
2110 Company Payable $0.00
2120 Producer Payable $0.00