Choose a Direct Bill Invoice Method - An Overview

The Default Company Settings section in Agency Setup controls the data source and invoicing options for direct bill transactions where no company-specific setups exist.

Example: You entered ABC Company in Company Setup, and made no selections in Billing Options. All direct bill transactions for Company ABC are pre-filled based on the selections in Agency Setup > Default Company Settings.

Therefore, use Agency Setup to make selections based on the most common source of data and invoicing method used in your agency. If you have ten companies that do direct bill and only three of those companies download premiums, then you should choose "Bill Using Manually Entered Premiums" as the default setup. You will then set up the lines of business where you receive premiums in download to use Download Premiums.

For invoicing-type, base your decision on when to recognize the income on the transactions:

Use this area to enter specific billing options for this company and those lines of business that differ from the options entered in Agency Setup > Default Company Settings.

Following are some examples of how to enter information for different companies:

Company #1 - Smith Company

Smith Company is P & C business only. Premiums are downloaded.

Considerations

• The transactions are received through daily download, rather than an initial load or reload process.
• Your agency wants to record income on the transaction effective date and then reconcile the items in Direct Bill Commission Statement to ensure that you receive all commissions due from the carrier.
• You want to record producer and broker commissions for this business.

Company Setup Decisions

In Company Setup > Billing Options set the line of business to All.

The following table lists the Company Setup > Billing Options to choose for the Direct Bill and Download Type options. See a sample data entry form.

Decision Components

Element	Reason for the Choice
Line of Business	Because you want to reconcile all direct bill business for Smith Company, select All for the Line of Business. If you want to make different selections for specific lines of business, you can enter those individually.
Direct Bill	Decision Reason for the Choice Customer Center You want income posted to the general ledger as of the transaction effective date rather than the direct bill statement GL date. Bill Using Downloaded Premiums Use this option to ensure that important fields in the Transaction Premiums section of the Policy form default correctly. This selection causes the Premium Display Option to default as "Include in Premium Totals" and the How Billed field as "Customer Center."   Premiums on manually entered direct bill policy transactions or transactions imported from third-party programs, such as rating, default as "Don't Include in Premium Totals" and "Not Billable." This prevents duplicate entry of premium. (You can override the default if necessary.)
Threshold Amount	Enter the maximum amount of dollar difference allowable between the premium reported on the Smith Company commission statement verses the premium amount invoiced in the Customer Center and still allow the transaction to be marked as reconciled. Items less than or equal to this amount are considered fully reconciled and marked accordingly via the Direct Bill Commission Statement reconciliation process.
Download Type	The Download Types are: Daily Download Initial Load Re-load Choose Daily Download for the type of transactions affected by your billing option selections.   If you plan to have an initial load or a re-load, you can change these options before doing the load. Then change them back for your daily download transactions.

Company #2 - Jones Company

Jones Company is P & C business only. Premiums are downloaded.

Considerations

• Your agency has a large volume of Private Passenger Auto business downloaded with premium.
• You do not want to reconcile direct bill items. However, you do want to record employee and agency commissions, as well as confirm the total of items entered matches the statement total.
• You want to post the income based on the statement or a selected GL Date, not the transaction effective date.

Company Setup Decisions

In the Company Setup > Billing Options section, select Private Passenger Auto as the Line of Business.

The following table lists the Company Setup > Billing Options to choose for the Direct Bill and Download Type options. See a sample data entry form.

Decision Components

Element	Reason for the Choice
Line of Business	The billing options for the Private Passenger Auto line of business differ from other lines of business (LOBs) written with this company.   If the billing options are the same for private passenger auto as for all other lines of business, you would choose (All).
Direct Bill	Decision Reason for the Choice Direct Bill Entry This selection causes the Premium Display Option to default as "Include in Premium Totals" and the How Billed field as "Direct Bill Entry."   When entering information in the Statement Identification section for the Direct Bill Entry statement, use the date you deposit the commission check as the "Statement Date." This becomes the general ledger posting date for all transactions. Having the posting date the same as the deposit date makes it easier to audit the Direct Bill Commissions Receivable (GL #11241 and #11242) accounts to verify that commissions were entered correctly. Your agency wants to record commissions from this company so you can pay producers and brokers. You also want your production reports to include these transactions. Bill Using Downloaded Premiums Select this option so the source of transactions for this company are by download.   Premiums on manually entered direct bill policy transactions or transactions imported from third-party programs, such as rating, default as "Don't Include in Premium Totals and Not Billable." This prevents duplicate entry of premium. (You can override the default if necessary.)
Threshold Amount	This option does not apply to the Direct Bill Entry method.
Download Type	The Download Types are: Daily Download Initial Load Re-load Choose Daily Download for the type of transactions affected by your billing option selections.   If you plan to have an initial load or a re-load, you can change these options before doing the load. Then change them back for your daily download transactions.

The following examples are for a company that writes P & C and Benefits business. The P & C business is downloaded, while the Benefits business is manual.           

P & C Business

Considerations

• You receive the P & C transactions through daily download.
• You want to reconcile the P & C direct bill items to the direct bill download statement for this company using the Direct Bill Commission Statement.
• You want to record employee and agency commissions.
• You want to post the income based on the statement or a selected GL Date, not the individual transaction effective dates.

Company Setup Decisions

Set the line of business in Company Setup > Billing Options to All.

The following example shows the Company Setup > Billing Options to choose for the Direct Bill and Download Type options.

Decision Components

Decision Element	Reason for the Choice
Line of Business	The billing options for the P&C business differ from the Benefits business for Anderson Company. The Line of Business for the P&C business should be set to All.   You are setting up your Benefits business by line of business. AMS360 always looks for a line of business match first. When it does not find a P&C line of business match, it looks to the overall Company billing option for all lines of business, which is to download and bill on the Direct Bill Commission Statement (deluxe).
Direct Bill	Decision Reason for the Choice Direct Bill Commission Statement (deluxe) Your agency's primary concern is ensuring that the P&C business received in download matches the amount received from the download company statement. You also need to record these transactions so allocations are made to producers and brokers; and your production reports reflect these transactions.   When creating and working the Direct Bill Commission Statement, use the date the company commission check was deposited to the agency bank account as the "Statement Date." This date becomes the "GL Date" for the transactions you reconcile and makes it easier to audit the Direct Bill Commissions Receivable (GL #11241 and #11242) accounts to verify that all received commissions were pulled and reconciled to the company statement correctly. Bill Using Downloaded Premiums Selecting this option insures that important fields in the Transaction Premiums section of the Policy form default correctly when P&C transactions are downloaded. With this selection, the Premium Display Option defaults as "Include in Premium Totals" and the How Billed field defaults as "Direct Bill Statement."   Premiums on manually-entered direct bill policy transactions or transactions imported from third-party programs, such as rating, default as "Don't Include in Premium Totals and Not Billable." This prevents duplicate entry of premium transactions, although you can override the default options when necessary.
Threshold Amount	The Threshold Amount does not apply to the P&C items reconciled in the Direct Bill Statement Bill Transactions section of the Direct Bill Commission Statement.
Download Type	The Download Types are: Daily Download Initial Load Re-load Select Daily Download because the transactions affected by these company billing option settings are received through daily download, rather than an initial load or re-load.

Benefits Business

Assumptions

• The Benefits transactions are entered manually. Currently, download is not available for Benefit policies.
• Your agency wants to record income on the effective date of the transaction and then reconcile the items through the Direct Bill Commission Statement to ensure that you receive all commissions due from the carrier.
• You want to record employee and agency commissions.

Company Setup Decisions

In Company Setup > Billing Options you must set up your benefits business by line of business. In other words, you must set up each Benefit LOB you use.

The following example shows the Company Setup > Billing Options to choose for the Direct Bill options.

Decision Components

Decision Element	Reason for the Choice
Line of Business	Since you need to handle your Benefits business differently than your P&C business for the Anderson Company, you must set up the direct bill billing option for each Benefits line of business.   The billing options for Anderson Company's P&C business is setup as All lines of business. AMS360 looks for a line of business match first and finds a match on each Benefit LOBs. Then, it looks for a company match for all lines of business which is the way your P&C business is set up.
Direct Bill	Decision Reason for the Choice Customer Center You want income posted to the general ledger as of the transaction effective date rather than the direct bill statement GL date. Bill Using Manually Entered Premiums Selecting this option insures that important fields in the Transaction Premiums section of the Policy form default correctly. With this selection, the Premium Display Option defaults to "Include in Premium Totals" and the How Billed field defaults to "Customer Center".   Downloaded premiums default to "Don't Include in Premium Totals and Not Billable". This helps prevent duplicate entry of premium transactions, although you can override the default when necessary.
Threshold Amount	This is the maximum amount of dollar difference between the premium reported on the Anderson Company commission statement verses the premium amount invoiced in the Customer Center. Any items that are less than or equal to this threshold are considered fully reconciled and marked accordingly via the Direct Bill Commission Statement reconciliation process.
Download Type	Not applicable for your Benefits business.

The third important setup area for successful direct bill transaction processing is the Commission Setup section of the Company, Employee and Broker forms. AMS360 offers processing solutions that minimize personnel handling of direct bill, but the results could be unsatisfactory if these areas are neglected.

The system looks for a match by Company/Line of Business in pulling Agency Commission to an invoice (Customer Center), Direct Bill Commission Statement or Direct Bill Entry Statement.

It also looks for a match by Employee/Line of Business or Broker/Line of Business to default the correct commission percentages. If these setups are not complete, additional work is required of the person posting the invoice (Customer Center), processing the Direct Bill Commission Statement or the Direct Bill Entry Statement to enter the appropriate agency and producer/broker commission amounts.

The extra time spent in correctly establishing these setups pays dividends in saved personnel costs down the line.

You can manually enter transaction amounts in the direct bill statement in the Transaction Premiums section the policy form using information from:

• Policy Dec pages & applications.
• Direct bill statements.
• Imported transactions from rating programs.

Important Considerations

If download is not available for a company, the only option is to Bill Using Manually Entered Premiums.

If downloaded premiums are available, but you choose to not use them, you can select to Bill Using Manually Entered Premiums. All downloaded premiums are flagged as Not Billable and are not included in Premium totals on the Policy form or in reporting.

Transactions available to direct bill statement processing can come from electronically transmitted download transactions.

Important Considerations

If certain lines of business for a company are downloaded and other lines are not, Company Setup parameters must be entered at the line of business level, not just Line of Business = All.

For companies and lines of business set up with this option, any premiums entered manually on the Policy form default as Not Billable and are not included in Premium totals on the Policy form or in reporting.

No invoices are created with this method. Therefore, any report that uses invoicing as a basis for reporting or calculating does not include these transactions.

• Use this option for companies where commissions payable and agency production information for direct bill transactions is not required.
• The data source for such transactions can either be manually entered or downloaded. In either case, the How Billed field defaults to "Receipt Check". You cannot create an invoice for these transactions and data will not flow to a Direct Bill Commission Statement or to a Direct Bill Entry Statement.
• This option does not provide producer or broker commissions for the Commission Payable Statement. If you need to track producer/broker commissions, choose anther Direct Bill invoicing method.
• This option does not provide agency production information on the production analysis report for this company and line(s) of business. If you need to agency production information, choose anther Direct Bill invoicing method.

In this method each direct bill policy is invoiced using the premium and non-premium amounts entered on the Policy data entry form.

1. Whether you enter policy data manually or download it, when the Company/Line of Business combination is set to "Customer Center" in Agency Setup or Company Setup, the How Billed field in the Transaction Premiums section of the Policy form defaults to "Customer Center".

2. Invoice the direct bill premium in the Policy data entry form, Invoicing section. How?

3. To reconcile invoiced items, create a Direct Bill Commission Statement (DBS). When you find a match for the same transaction on the Company Statement, mark the transactions as "Included" on the DBS Statement > Customer Center Billed Transactions section.

When direct bill items are posted through the Customer Center (policy), income posts to the general ledger based on the invoice effective date. No general ledger postings occur when the items are reconciled via the Direct Bill Commission Statement.

The Direct Bill Commission Statement (Deluxe) method is fully integrated with policies entered in AMS360. Because of this, it is called Deluxe and allows for the following:

• Reconciliation and posting whether you download your policy transactions or enter them manually.
• Reconciliation for Customer Center Billed transactions.

Income posts as of the Direct Bill Statement GL Date, not the transaction effective date. This means that income is recognized on transactions with future effective dates because they are included on a statement.

Comparing Transactions Received in Direct Bill Statement Download

1. When you choose to bill using the Direct Bill Commission Statement, the How Billed field in the Policy > Transaction Premium is set to "Direct Bill Statement."

2. When you create a Direct Bill Commission Statement, the policy transactions that have the How Billed option set to Direct Bill Commission Statement flow to the Direct Bill Statement Billed Transaction section of the form.

3. You can manually reconcile items on the Direct Bill Commission Statement by selecting the Include check box for each item that appears on the Company Statement.

4. If you download direct bill statements, these items appear in the Compare Transactions Received in Statement Download.

5. You can use Auto Match to automatically match as many transactions between the Direct Bill Statement Billed Transactions section and the Compare Transactions Received in Statement Download.

6. You can manually match the remaining transactions using the Match indicators. The Match indicator opens the Match Statement Transactions form and gives you the most likely match to your policy transaction.

7. You can add Additional Transactions (policy trans) to the Direct Bill Statement Billed Transactions section of the Direct Bill Commission Statement.

8. The only items that actually post on the Direct Bill Commission Statement are those in the Direct Bill Statement Billed Transactions section.

9. When the statement is posted, the items on the statement are assigned an invoice number and commissions are posted to income.

Customer Center Billed Transactions (Reconciliation Only)

1. You can reconcile individual Customer Center Billed Transactions appearing on the Direct Bill Commission Statement to the Company Statement.
2. You can add Additional Invoices and Correct Invoices from the Customer Center Billed Transactions section of the Direct Bill Commission Statement.
3. Items are already billed through the Customer Center, so no general ledger postings occur for items in this section.

The fourth method of handling direct bill business is Direct Bill Entry. This method allows you to quickly enter direct bill accounting information (commissions, production, and income) independent of policy data. You can also use information from previously entered policies.

This method includes the following features:

• You can enter direct bill commissions directly in the new Direct Bill Entry form without having entered a Policy ( Accounting Only Policies).
• You can enter direct bill commission using a Policy System option that integrates your entry with the policy system.
• You can enter direct bill commission using an option that looks up entries from a Prior Direct Bill Entry Statement.
• Commission corrections are simplified.
• You can use Direct Bill Entry to post your Downloaded Direct Bill Statements. A new Download Statement Utility is available to convert any existing direct bill statement downloads to this new method. (The utility is only required for direct bill statements downloaded before this option was available and set in your system.)
• Direct Bill Entry setups in Agency Setup > Default Company Settings and Company Setup > Billing Options offer this new option. (Company Setups take precedence over the Agency Setups.) Use this selection for any new policies or direct bill download statements you enter.
• A new Direct Bill Entry Statement report is available for tracking items entered using Direct Bill Entry.
• A new historical Downloaded Direct Bill Statement report is available for managing Downloaded Direct Bill Commission Statements.
• Agencies converting from AfW can migrate to AMS360 using this new Direct Bill Entry method.