Producer Setup Options

Product: The Agency Manager Series

TAM has two choices for direct bill and three choices for agency bill to track producer commissions. The options track how the producer receives commission for invoices.

This document is divided into the following sections:

Agency Bill Producer Payment Options

Pay on Fully Paid Items

When an agency is set up to pay the producer on fully paid items, the producer will not receive his or her commission on that invoice until the item balance is at zero. Credits or debits are applied to the item until the balance is 0 (credits if item is a debit, debits if item is a credit). For example, if an item is invoiced for $100 and a payment it applied for the item for $99.99, the producer will not receive commission for this item until the last penny is applied. So if the item was invoiced in June 2000 and the final penny was applied in August 2000, the commission for this invoice would show up on the producer’s August 2000 statement. Commission is earned when the item is fully paid and not until then.

Pay on Partially Paid Items

This setup is similar to paying on fully paid items. Again, the balance on the item needs to be applied to the appropriate offsetting item. However, the producer will receive commission just on the amount of the invoice that has been paid. The commission is earned for the portion applied. For example, there is an invoice for $100 and the producer is receiving 10% commission, the customer has paid $50 and it has been applied to the invoice, the producer will only receive $5 of commission for that item, since only $50 has been applied to the invoice. If the next month the remainder is paid for, the producer receives the remaining commission.

Pay on Invoiced Items

For this option, the agency cannot be installed on a CASH basis.

Paying on invoiced items is very different than the above two options. When the item is invoiced, the producer automatically receives commission, regardless of whether the client pays for the invoice or not. The balance of the item is never a consideration for the producer earning commission.

For information on Deferring Producer Commissions, refer to the Deferred Producer Commissions document.

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Direct Bill Producer Payment Options

Pay on Invoiced Items

The month the invoice is created is the month the producer will receive commissions for that item. The item does not have to be reconciled in order for the producer to receive commission.

Pay on Paid Items

In order for the producer to be paid for the invoice, the item has to be reconciled in direct bill reconciliation. Essentially, there are two steps involved: The item has to be invoiced and reconciled either partially or fully. The producer will receive commission in the month the item is reconciled and for the portion reconciled. This is the same as partially paid for agency bill. There is not an option for fully paid on Direct Bill.

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Producer Adjustments

Adjustment to producer commissions on TAM can be difficult to track if the agency is not caught up with closing months. The adjustment will file in the month of the system sign on date. For example, the agency’s current accounting month is in June 2000, and the system date is July 12, 2000. If the agency adjusts the commission on the invoice, the adjustment will show on the producer’s July 2000 statement.

If the producers are selected at the Producer Detail screen to Accept Month-End Generated Journal Entries, the system will calculate their commission amounts via journal entry. For the detail of the journal entry, refer to the TAM Month-End Generated Journal Entries document, under MJE #4.

To verify your agency’s setup on version 6, access DOSTAM-UT-6-8 Check GL Setup Options, and answer Yes to proceed. Print this out to review your agency’s current TAM accounting setup.

To verify your agency’s setup on version 7, access Utilities, Accounting, Setup, GL Setup Report. Print this to review your agency’s current TAM accounting setup.

For information on changing your producer payment method, refer to the Changing Producer Payment Method- Direct Bill document or the Changing Producer Payment Method- Agency Bill document.

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Last Revised: April 01, 2008 11:35 AM

SWE12110