Billing Charges and Credits Setup

This feature, or some fields and options described, might not be available depending on your settings, security rights, or platform package.

Billing Charges and Credits are invoice transactions available for use during the billing process. The system ships with a permanent set of charges and credits that cannot be edited or deleted. You can add additional charge types, such as state-specific taxes/fees or unique agency fees, if needed.

Accessing Billing Charges and Credits Setup

From any center or form that has a Toolbox menu, click Toolbox > System Administration > Accounting Setups >Billing Charges & Credits.

You must have proper authorization to access Billing Charges & Credits Setup.

Fields in Billing Charges and CreditsSetup

Field

What is this?

Charge Description

This description appears in the Billing Charges and Credits list box.

Report Description

This description appears on all reports, and is normally the same as the Charge Description.

Short Name

Enter a descriptive short name.

Inactive

This field is used to inactivate charge types that are ineligible for deletion. See Workflow: Add, Edit and Delete Billing Charges & Credits topic.

Category

There are four categories of charges/credits available in AMS360:

Group/Field

What is this?

Non-Premium

This is the default. A type of charge not classified as premium, such as taxes and fees. May or may not be associated with commission.

Down Payment

An amount associated with this category does not post to the general ledger. It is a memo entry designed for display on the printed invoice only.

Financed

A type of invoice entry associated with premium financing.

Premium

You cannot add additional charge types in the Premium category.

Each Line of Business (LOB) in Line of Business Setup is associated with one of four permanent premium groups. The premium group determines the General Ledger Income Account where the commission is posted when this Premium charge type is used. The following GL accounts are affected:

Income Group	GL Ledger Accounts
Property and Casualty Premium	40111 or 40112 - Agency Bill - Insurance or Brokerage Co. 40121 or 40122 - Direct Bill - Insurance or Brokerage Co.
Life & Health Premium	40211 or 40212 - Agency Bill - Insurance or Brokerage Co. 40221 or 40222 - Direct Bill - Insurance or Brokerage Co.
Other Premium	40311 or 40312 - Agency Bill - Insurance or Brokerage Co. 40321 or 40322 - Direct Bill - Insurance or Brokerage Co.
Financial Services Premium	40411 or 40412 - Agency Bill - Insurance or Brokerage Co. 40421 or 40422 - Direct Bill - Insurance or Brokerage Co.

Charge Recipient

Select the Charge Recipient. Your selection determines the options (GL Number, Deferred GL, or Income Group) available and their list box contents.

The numbers for the Premium or Financed charge categories are system-assigned, based on the Charge Recipient selected.

Example:

The agency is the charge recipient for a special charge called "Loss Control Service Fee". In Chart of Accounts Setup you create an income account called, "Loss Control Fee Income". In Billing Charges & Credits Setup you need to create the Non-Premium charge type, Loss Control Service Fee and associate it with the Charge Recipient- Agency and the GL Number you created in the Chart of Accounts.

Charge Method

Used to calculate the charge amount:

Option/Checkbox	What is this?
Flat Rate	Enter an amount here if the invoice amount is a standard dollar amount. Example: If you always charge a flat $25.00 as a Returned Check Fee, type in 25.00 in the flat rate field. The defaulted amount can be overridden during invoicing.
Percent of Premium	Enter the number to be calculated as a percent of the premium. Example: Your county charges a local tax that is .2% of the premium amount, type .2 in the field. The defaulted amount can be overridden during invoicing.
None	Select this method if the amount is variable. Indicates you do not want the system to calculate and allows the person adding the charge to a billing to enter the desired dollar amount.
Include charge amount in 1st distribution	When this box is checked, this billing charge or credit will only be applied to the first installment of an installment billing.

Default Commissions in Billing

Check one or more boxes if commissions from agency, employee or broker setup should default when the charge is used in invoicing.

General Ledger Posting Information

Use the table below to determine how a preset or newly created billing charge and credit posts to the general ledger (GL). The GL posting is based on a combination of Category and Charge Recipient. Some charges and credits are effected by the Accounting Basis of the agency, and others by the Insurance/Brokerage type of transaction.

Accounting Basis

The charge or credit posts on its effective date for accrual-basis accounting, and to a deferred account for cash-basis accounting. The deferred account stores the charge or credit until it is collected or paid out. Once posted, the money is moved from the deferred account to the appropriate GL payable or income account (account specified for accrual based accounting).

Insurance/Brokerage Transaction

Lastly, when the Charge Recipient is Insurance/Brokerage Company, the accounts effected by GL posting depend on whether the recipient is an Insurance Company, or a Brokerage Company. See the chart below:

Category/Charge Recipient	Accounting Basis	GL Account	Purpose
Non-Premium/Agency	Accrual... Cash...	41130 21430	Agency fees not paid to the Insurance Company.
Non-Premium/Insurance Company	Accrual & Cash	21111... 21112...	Insurance Company Fee. Brokerage Company Fee.
Non-Premium/Fee Company	Accrual & Cash	21119	Taxes and fees remitted directly to state insurance departments and surplus lines associations.
Financed/Agency	Accrual & Cash	11231	Reduces the Customer Receivable and increases the Finance Company Receivable.
Financed/Insurance Company	Accrual & Cash	21111... 21112...	Reduces the Insurance Company Payable. Reduces the Brokerage Company Payable.
Down Payment/No Charge Recipient	N/A	N/A	This credit does not post to the general ledger. It is a memo entry on the invoice that reduces the invoice balance.

What's Next?

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