Difference between revisions of "Direct Bill (Broker Billed)"
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| + | <td>[[File:Ic_description_black_24dp.png|link=Newton User Guide#Accounting - Invoice/Billing]] Newton User Guide: [[Newton User Guide#Accounting - Invoice/Billing|Accounting - Invoice/Billing]]</td> | ||
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<td>Related Pages</td> | <td>Related Pages</td> | ||
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| + | <li>[[Agency Bill]]</li> | ||
| + | <li>[[Agency Bill (Broker Billed)]]</li> | ||
<li>[[Direct Bill]]</li> | <li>[[Direct Bill]]</li> | ||
| + | <li>[[General Ledger Profile]]</li> | ||
<li>[[Invoice: Create An Invoice]]</li> | <li>[[Invoice: Create An Invoice]]</li> | ||
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| − | === Receipt Money (Cash) | + | === Receipt Money (Cash) From the Broker Accounting Entries === |
If you receive a payment from the Broker on a direct bill transaction, that is called a transmittal. A transmittal consists of two transactions; cash in, and a check out. | If you receive a payment from the Broker on a direct bill transaction, that is called a transmittal. A transmittal consists of two transactions; cash in, and a check out. | ||
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| − | === Receipt Money (Cash) | + | === Receipt Money (Cash) From the Company Accounting Entries === |
When you receive payment from the company, you will create a cash transaction crediting the company receivable. | When you receive payment from the company, you will create a cash transaction crediting the company receivable. | ||
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Latest revision as of 17:16, 31 August 2018
 Newton User Guide: Accounting - Invoice/Billing |
| Related Pages |
| Related Categories |
Direct bill refers to an invoice where the Broker pays the insurance company direct. The agency commission (GA) is sent to the agency by the insurance company and recorded with GL 1130 - Company Receivable. The broker commission creates a credit Accounts Receivable balance that is paid through reconcile (GL 1120 - Accounts Receivable).
See Direct Bill for regular personal or commercial retail Direct Bill invoices.
Contents
Direct Bill Invoice Accounting Entries
A Direct 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 | $ 11,000.00 | Direct bill reversal + broker commission. ($10,000.00 + $1,000.00) | |
| 1130 | Company Receivable | $ 2,000.00 | The company owes you $2,000.00. | |
| 4120 | Direct 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) |
Receipt Money (Cash) From the Broker Accounting Entries
If you receive a payment from the Broker on a direct bill transaction, that is called a transmittal. A transmittal consists of two transactions; cash in, and a check out.
In our example, you can see that there is no balance on Broker; they owe the money to the company, not you. The transmittal will not change the balance either; the monies will be passed through your office, but will not permanently change the balances.
When the money is received, a cash receipt is created. If this were for $10,000.00, it would affect these accounts:
| GL Account | Name | Debit | Credit |
|---|---|---|---|
| 1100 | Cash in Bank | $ 10,000.00 | |
| 1120 | Accounts Receivable | $ 10,000.00 |
A check is then issued to reset these balances. The check must charge the Accounts Receivable for this broker to reset his balance. The payee on the check is overridden to the company.
| GL Account | Name | Debit | Credit |
|---|---|---|---|
| 1120 | Accounts Receivable | $ 10,000.00 | |
| 1100 | Cash in Bank | $ 10,00.00 |
Receipt Money (Cash) From the Company Accounting Entries
When you receive payment from the company, you will create a cash transaction crediting the company receivable.
| GL Account | Name | Debit | Credit |
|---|---|---|---|
| 1100 | Cash in Bank | $ 2,000.00 | |
| 1130 | Company Receivable | $ 2,000.00 |
Broker Check Accounting Entries
The check to the broker is similar; it will reduce your bank account and zero the accounts receivable.
| GL Account | Name | Debit | Credit |
|---|---|---|---|
| 1120 | Accounts Receivable | $ 1,000.00 | |
| 1100 | Cash in Bank | $ 1,000.00 |
Direct 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 | |
| 1120 | Accounts Receivable | $ 0.00 | |
| 1130 | Company Receivable | $ 0.00 | |
| 4110 | Direct Bill Income | $ 2,000.00 | |
| 5109 | Producer Expense | $ 1,000.00 |
