How to Balance the Earned Commissions Report to the General Ledger

Product: TAM Series 6 & 7

The Earned Commissions Report is used by agencies installed on a cash basis for their agency bill business to verify the Month-End Journal Entry (MJE) which posts to the various agency income accounts. This report is based on payments received by or made to customers. 

Cash vs. Accrual

Agencies that are installed on an accrual basis for Agency Bill recognize their agency income when the agency bill item is invoiced or when the AFE is invoiced or service charges are generated, whether the clients have paid for the billing or not. This document focuses on agencies that are installed on a cash basis. This means that the agency bill income is recognized when the client pays the billing and then the receipt is applied to the invoices. This can be applied at the time of the deposit or through the J/E between items on the Transaction menu. Return Premium Checks (RET) that are applied will also affect the income.

How Are You Set Up?

To see how your agency is set up in TAM, you need to go to the main screen in TAM.

Version 6.3.0 and Below

  1. Select Options and The Agency Manager for DOS.
  2. Select UT for Utilities.
  3. Select #6 for Accounting Setup, then either #7 or #8 : Check GL Set Up Options, Yes to Proceed.

Version 7.0.0 and up

  1. Click the Utilities button.
  2. Select the Accounting Folder, then the Set Up folder.
  3. Select the GL Setup Report.

The beginning of the third paragraph reads: "Agency Bill Cash/Accrual Method." This will indicate 1-Accrual Basis, 2-Cash Basis-partially paid items, or 3-Cash basis-Fully Paid items. Note how your agency is set up here. If you are set up on a cash basis, then the Earned Commissions Report can be run to verify the MJE that posts for your Agency Bill Income. If you are on an accrual basis, refer to the TAM Month-End Generated Journal Entries Document

Running the Earned Commission Report 

The purpose of this report is to show how much commission was received (earned) for the month based on the payments received for agencies set up on a cash basis. See the TAM Month-End Generated Journal Entries Document for an explanation of all the Month-End Journal Entries and how to verify them.

To balance to your general ledger, the Earned Commissions Report must be run according to your setup. This report can be run either from:

To set up the criteria for this report, follow these guidelines:

Agency See A Below
Branch See A Below
Department See A Below
Transactions  Payments and Returns
Accounting Month The month you are trying to verify
Full/Partial See B Below
Sort Option Your Choice
Output Complete

Notes:

A: These parameters can be set up according to the Agency, Branch, Department accounts you are trying to verify. Just be sure to set up the income statement for the same parameters. You may run this for all Agencies, Branches, and Departments. 

B: This parameter must correspond to your GL Setup. If you are set up for 2-Cash Basis-Partially Paid Items, then you need to run this to Include Partially Paid/Returned Items. If you are set up for 3-Cash Basis-Fully Paid Items, then this needs to be Only Fully Paid, Returned Items

Partially Paid vs. Fully Paid 

The Earned Commissions report shows the internal transactions (CRP, DBA, CRI, DBI, etc.) generated by TAM when the balances are applied, rather than the original items (PAY, ADV, RET). This occurs because TAM files the commission on these internal transactions.

Partially Paid

If your agency is set up for partially paid items, this means that items are paid by the client, entered into TAM as a receipt, and are applied to a production item generate agency income. This generates even if there is still money due, i.e., if the item has a partial balance left on it.

Fully Paid

If your agency is set up for fully paid items, the income generates only if the item has been fully paid, i.e., if the item has a zero balance.

The system generates this income from the internal transactions that are:

These are the transactions that appear on the Earned Commissions Report.

Matching the Earned Commissions Report to the General Ledger 

To compare this report to the general ledger, the income statement, the status of accounts, or the schedules report needs to be run.  

TAM: Reports, General Ledger, Income Statement

DOSTAM: GL (General Ledger) - 11 (Income Statement)

Note:   The current period or net change figures will only match the Earned Commissions report if no other manual journal entries have gone to any of your income accounts.

Last Revised: February 19, 2008 02:23 PM

SWE18435