Binder Transactions and Invoicing

You can use the Binder Transactions and Invoicing features to invoice an insured for coverage before the actual receipt of the policy or confirming endorsement from the carrier. Usually the reason for doing a binder transaction is because the agency, when they are required to pay a carrier on an Account Current basis, does not want an invoice to appear on the account current before the policy is issued and received by the agency.

Depending on the Binder Post Method, binder invoices may not post to the insurance company payable account until they are replaced. See the Binder Invoicing and Agency Setup section below.

Successful binder billing in AMS360 depends on setting up the policy transaction correctly.

  1. From the Customer Center open the customer for which you want to set up a binder transaction, and then select Views > Policies.
  2. Select the policy to be renewed in the Policy # column by clicking anywhere on the policy row (except the policy link).
  3. Click New Policy from the toolbar. The Create New Policy form appears.
  4. Select the appropriate Type of Business from the list.
  5. Change the Transaction field to "Binder New Business".
  6. Complete all other fields as for any new policy. Click OK. The Policy form opens.

    Policy # is a required field. If the number is not yet available, use BINDER, TBD, or some other temporary policy number designation.
  7. Complete the sections. Premiums should be estimated based on a company quote or agency standards for deposits to bind coverage.
  8. When you create the invoice the printed invoice indicates this is a binder billing.
  9. Click the Post icon, monitoring the Status Bar to verify the posting action.
  1. From the Customer Center open the customer you want to renew a binder, and then select Views > Policies.
  2. Select the policy to be renewed in the Policy # column by clicking anywhere on the policy row except the policy link.
  3. Click Renew from the toolbar. The Create Renewal/Rewrite Policy form opens.
  4. Change the Transaction field to "Binder Renewal" and complete the form. Click OK.
  5. The Policy form appears. Complete the sections. Premiums should be estimated based on a company quote or agency standards for deposits to bind coverage.
  6. When you create the invoice, the printed invoice indicates this is a binder billing.
  7. Click the Post icon, monitoring the Status Bar to verify the posting action.
  1. From the Customer Center open the customer for which you want to renew a binder, and then select Views > Policies.
  2. Select the policy to be renewed in the Policy # column by clicking anywhere on the policy row (except the policy link).
  3. Click Endorse from the toolbar. The Endorsement form appears.
  4. Change the Transaction field to Binder Endorsement and complete the form. Click OK. The Policy form openss.
  5. Update the sections affected by the endorsement. Enter estimated endorsement premium and bill, if desired.

The Binder Post Method you choose in the Accounting Options section of Agency Setup determines when binders and binder replacements affect the general ledger.

Binder Post Methods What is this?

Post Expense on Effective Date

Binder billings automatically post the payables, income, and expenses on the invoice effective date, regardless of whether you replace the binder.

This is the method you might have chosen if your agency wants to recognize income and producer expense before the binder is replaced.

Post Expense After Replaced on Later of Effective or Replace Date

Upon posting of the replace transaction the payables, income and expenses post with the invoice effective date or the replace date, whichever is later.

Binder invoices post to an accounts receivable account to allow for timely collection or return of premiums:

  • 11211000-A/R Agency Business
  • 11221000-A/R-Broker Business
  • 11231000-A/R-Finance Co.

If your Binder Post Method in Agency Setup is set to "Post Expense on Effective Date," the offsetting entries post to the appropriate payables, income and expenses on the invoice effective date.

If your Binder Post Method in Agency Setup is set to "Post Expense After Replaced on Later of Effective or Replace Date," the offsetting entries post to a "deferred binder" account until such time as the binder transaction is replaced:

  • 11213000-Deferred Binder-A/R Agency Business
  • 11223000-Deferred Binder-A/R Broker Business
  • 11233000-Deferred Binder-Finance Co

Example:

Binder billing of $10,000 P & C premium to the customer, broker, or finance company.

Agency Business
11211000-A/R Agency Business 10,000.00 11213000-Deferred Binder A/R Agency Business (10,000.00)
Broker Business
11221000-A/R Broker Business 10,000.00 11223000-Deferred Binder A/R Broker Business (10,000.00)
Finance Company
11231000-A/R Finance Co 10,000.00 11233000-Deferred Binder Finance Co (10,000.00)

See Binder Bill for an example of posting entries for replace invoices.

What's Next?

Refer to Binder Bill to learn how to update transactions when you receive the policy from the company. Use the Unreplaced Binders Report to manage outstanding binder transactions.

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