How To: Determine Income from Installments for Current Policies

Due to FASB (Financial Accounting Standards Board) and IASB (International Accounting Standards Board) issuance of ASC 606 which outlines new GAAP standards on the recognition of revenue from contracts with customers, AMS360 has updated the Future Invoice report to provide visibility into revenue for invoices not yet posted to income in the general ledger.

 

Before adopting any new accounting practices, Vertafore recommends that you consult with your tax accountants, financial advisers or CPAs to see if the new standards apply to your agency.

The changes to the Future Invoice report include:

  • View Date option – allowing the user to view transactions as of a specified day.
  • The inclusion of advanced invoice transactions.

Changes to the CSV file include the following new columns

  • Installment Invoice – Indicates if the invoice is an installment or not
  • Row type – indicates if the invoice is ‘Unposted’ to the GL (Future) or is an ‘Advanced’ invoice (GL posting date is after the report’s view date)
  • AgcyFeeAmt – Agency fee income that is included on the invoice
  • AgcyIncomeAmt – representing the total of AgcyCommAmt + AgcyFeeAmt

If you are billing transactions (either agency bill and/or direct bill items) as Customer-center billed transactions, use this report to identify all advanced and future billed items. By exporting the CSV file to Excel, the expected income for these items can be easily calculated.

Run the Report

  1. From Toolbox, select Classic Reports and choose the Future Invoice report
  2. Select the following printing options:
    1. Bill Method = Agency and Direct Bill (direct bill is customer center billings)
    2. Customer, Representative, Executive and Broker = (All)
    3. Sort Order = any selection
    4. Business Unit = click link and verify your business unit selection
    5. View Date = Current Date
  3. From the File menu select, Create CSV.

Modify the CSV

Most likely you will want to do the following:

  1. Open the CSV in Excel.
  2. Set Filtering for all of the columns in the exported data.
  3. Filter off all records where the policy effective date is greater than the View Date.
    • PolEffDate column
  4. Filter off all records that have a suspended billing.
    • Clear the value ‘*’ in the Susp column
  5. Filter off all records that are not installment invoices.
    • Clear the value ‘N’ in the Installment Invoice column
  6. Sum the total of the AgcyIncomAmt column.
    • This should be the amount that will be held in an agency created income account. A positive value in the report should be the credit amount total in the GL Account.
 

If you do not want to include agency fees as part of your income, then sum AgcyCommAmt column.