Binder bills are used to generate an invoice prior to the policy being issued by insurance company. A binder bill transaction is used to start the accounts receivable process without incurring the liability to the company.
In TAM, click Transaction List, Add, Add a Transaction, and select the policy, and the type of transaction you wish to enter (General, or Installment plan ). The Binder Bill box becomes available if policy is not a direct bill policy and if Finance transaction is not chosen. Click the Binder Bill box to select. Complete the transaction as usual; it will file in Binder Bill mode.
To close a binder bill transaction, click the following:
There are three options when closing binder bills:
Close Binder, Create Adjustment - Summary Invoice
When the first option of Close Binder, Create Adjustment - Summary Invoice, is selected, the system allows you to make changes, such as the amount, the commission, etc. The new account current transaction that is created in this process will include this information. If changes are made, a question displays: "Do you wish to apply the changes to the current policy screen?" Choose either Yes or No.
The system creates the reversing binder and the account current item. The system also applies debits to credits between the three items (first between the original binder and the reversing binder, then to the account current item if the original binder has had monies applied previously). The account current item will have the transaction date and the due date of the original binder. If a change was made to the amount, a MEM transaction will be created for the difference between the original binder and the account current item. The MEM will print in Close-Day.
Close Binder, Create Adjustment - Detail Invoice
When the second option of Close Binder, Create Adjustment - Detail Invoice, the system allows you to make changes, such as the amount, the commission, etc. The new account current transaction that is created in this process will include this information. On this option, you are presented with two questions. The first one is "Do you wish to attach reversing credit to rebilled items?" Answering Yes allows the system to apply the reversing binder amount to the account current item. The original binder will still be open on the aged receivables report if it has not been paid. If you answer No, the system does not apply any credits or debits to the items involved.
The second questions is "Do you wish to apply the changes to the current policy screen?" Choose either Yes or No. This question displays only if there has been a change made. The account current item will have the current transaction date and due date. A MEM is not created if a change was made to the amount. The reversing binder and the account current transaction both print in Close-Day.
Reverse Binder - Reinvoice Manually
When you select the third option of Reverse Binder - Reinvoice Manually, the system creates a reversing binder bill entry. An account current item is not created. These items also are not applied to each other. The reversing binder prints in Close-Day.
When the binder bill transaction is created:
When the binder is closed, the reversing binder:
When the binder is closed, and either summary or detail is selected, the production transaction created:
Binder billed installment basically work like regular installments. They are entered the same in the same manner as regular installments; you can enter them individually or as an installment plan.
Binder Bill Installments have no effect on the General Ledger while they are still pending.
In TAM, select Transaction List, Pending, highlight the binder bill transaction you need to close, click Detail, and find the Binder Bill Status box in the upper right. Click on the box and remove the "X" from this box to undo the binder bill status. Then update the remaining installments as necessary.
Binder Billed Installments are processed like any other installments through the Close-Day procedure. On the print date they are moved from "Pending" to "General" and will appear with a "b" next to them when viewing transaction history. When processed, it affects the General Ledger the same as a binder bill that is not an installment. It debits Accounts Receivable, credits Binder Bill Payable, and credits Commission.
The Binder Bill Payables account can be balanced using the Binder Bill Payables Balancing report found under the General Ledger section in Reports.
Last Revised: April 06, 2011 09:45 AM