General Ledger Settings

In This Topic...

When a policy is booked General Ledger entries are created for the Premium charges. If the appropriate General Ledger accounts have been configured, entries are made in the Written Premium - General Ledger account, as well as one of the following accounts:

  • If the Billing Option is Direct Bill, entries are made in the Premium Accounts Receivable - General Ledger account.
  • If the Billing Option is Agency Bill, entries are made in the Agency Bill Accounts Receivable - General Ledger account.

The General Ledger - Settings page allows the user to control the point of the policy life-cycle upon which entries are made in the appropriate General Ledger accounts for Premium charges.

Managing General Ledger Settings

  1. Open the appropriate Billing Entity. For instructions on finding and opening a billing entity, see the section on Managing Billing Entities.

  2. In the Billing Entity Menu, navigate to the General Ledger menu option and open the Settings page. The General Settings - General Ledger Settings page opens.

    The General Ledger Entries panel contains the options that determine when General Ledger entries for Premium charges are created during the policy and billing life-cycle.

    Book Policy Premium On Select the event upon which the system will create General Ledger entries for charges of type Premium that result from a policy transaction. The following options are available.
    • Invoice Generation
    		The system will create General Ledger entries for Premium charges upon Invoice Generation. This is the default setting.
    • Policy Bind
    		The system will create General Ledger entries for Premium charges once the policy transitions into Bound status.

Note: The setting defined here only applies for charges of type Premium. All other billing installments are booked upon the Invoice Generation event.

If the settings option for General Ledger Entries is on Policy Bind the following entries are generated:

  • Accounts Payable - Distributor - For the distributor on the policy.
  • Commission Expense
  • Tax Payable – An entry for each tax on the policy is created.
  • Written Premium – Premium Name. An entry for each premium on the policy is created.
  • If the Billing Option is Direct Bill, entries are made in the Premium Accounts Receivable - General Ledger account.
  • If the Billing Option is Agency Bill, entries are made in the Agency Bill Accounts Receivable - General Ledger account.

If the settings option for General Ledger Entries is on Invoice Generation the following entries are generated:

  • Accounts Payable - Insurer – For the insurer on the policy.
  • Deferred Insurance Direct Cost
  • Accounts Payable - Distributor – For the distributor on the policy.
  • Deferred Commission Expense
  • Tax Payable – An entry for each tax on the policy is created.
  • Written Premium - The Premium name. An entry for each premium on the policy is created.
  • If the Billing Option is Direct Bill, entries are made in the Premium Accounts Receivable - General Ledger account.
  • If the Billing Option is Agency Bill, entries are made in the Agency Bill Accounts Receivable - General Ledger account.