Required Accounts Configuration

Accounts Receivable

Asset

Regular or Subaccount

Balance due from Clients (Broker, Other Interest, and Finance Company)

The money due from all entities in the system (based on the transactions entered in the system).

Agency Bill Income

Income

Title

Note that Agency Bill Income and Direct Bill Income can be the same account if desired. The system automatically generates subaccounts based on the various Income Posting Breakdown methods.  Earned agency bill income from Account Current, Company Fee, and Company Tax Agency Bill transaction classes (on accrual basis, all transactions. On cash - partial or cash - fully paid basis, only paid items)

Agency Bill income earned this year.

Agency Bill Unearned Income

Asset, Liability, or Equity

Regular or Subaccount

Used if Agency Bill revenue recognition is on partial/fully paid cash basis. This will be offset until the receivable is paid.

For an agency on a cash basis, the balance is the remaining income billed but not yet earned.

Binder Bill Payable

Liability

Title

When binder bill transactions are entered, the deferred premium payable balance remains in the Binder Bill Payable account until the binder bill transactions are closed, at which point the balance is transferred to the appropriate premium payable account.

This account displays only if binder bill transactions are or previously were enabled in System Settings.

Premium payables that are not yet recognized because the binder bill transactions are still open.

Broker Commission Expense

Income or Expense

Regular or Subaccount

Recognize the broker’s commission expense (external brokers in the case of interagency functionality). At time of invoicing if brokers are paid on an Accrual basis or if broker commissions are deferred, otherwise recognized when receivables are partially/fully paid.

Total expenses for broker commission for this year.

Broker Commission Payable

Liability

Title

Payable account for broker (external brokers in the case of interagency functionality) commissions due to be paid. Offset either at time of invoicing or when receivables are partially/fully paid based on broker commission setup.

Remaining amount of commissions now due to Brokers (payment of broker commissions should be made against this account).

Broker Commission Payables Write-Off

Liability, Income, or Expense

Title

Broker commission payables written off for a receivable broker. Only applies if system is configured to reconcile brokers (see System Settings).

Broker commission payables written off.

Broker Premium Payable

Liability

Title (one subaccount is created/used per external Premium Payable Broker)

Premiums due to Premium Payable Brokers

Remaining amount of premiums due to premium payable brokers (payment of premium payable statement should be made against this account).

Broker Premium Payable Write-Off

Liability, Income or Expense

Title (one subaccount is created/used per external Premium Payable Broker)

Premiums written off for a Premium Payable Broker

Premium Payable balances written off.

Commission Payable Cash on Account

Asset

Title

This is a holding account for broker commissions deposited via Receipts that have not yet been applied to particular items/statements.

Broker commission payable deposits not yet associated to a reconciliation statement.

Company Payables

Liability

Title

Company Payables: each company gets its own subaccount for premiums due to it.

Remaining amount of premiums due to companies (payment of premium payable statement should be made against this account).

Company Payables Write-Off

Liability, Income, Expense

Title

Company Payable/Premiums written off for a given company.

Premium Payable balances written off.

Defer Company Payables

Liability

Title

Company Payables deferred if installment revenue is recognized immediately but the company is paid on an installment basis

Premiums that will come due for future installments and where the revenue has already been recognized.

Defer Receivables

Asset

Regular or subaccount

If Recognize installment revenue immediately is selected, the income is recognized immediately, but the receivables and company payables are deferred and moved to current receivables/payables when the installment comes due.

Receivables that will come due for future installments and where the revenue has already been recognized.

Deferred Broker Commission Payables

Liability

Title

If broker commissions are set to defer, this account is used until the receivable is paid (invoiced but not yet due to a broker paid on a cash basis). For external brokers.

(External) Broker commissions for transactions that have been invoiced but not yet paid by the client.

Deferred Broker Premium Payable

Liability

Title (one subaccount is created/used per external premium payable broker)

External Premium Payable Broker Payables deferred if installment revenue is recognized immediately but the company is paid on an installment basis.

Premiums that will come due for future installments and where the revenue has already been recognized.

Deferred Income

Equity, Liability, or Asset

Regular or subaccount

When a Service Fee transaction is entered, income cannot be recognized until the service has been rendered. If the service is to be performed over an extended period of time, a revenue deferral schedule is entered for the transaction. The revenue is then deferred and recognized in installments scheduled for the accounting months in which the service is to be performed.

Revenue that will come due for future installments in a revenue deferral schedule.

Deferred Producer Commission Payable

Liability

Title

If producer commissions are set to defer, this account is used until the receivable is paid (invoiced but not yet due to a producer paid commission on a cash basis).

Producer commissions for transactions that have been invoiced but not yet paid by the client.

Direct Bill Commission Cash On Account

Asset

Title

This is a holding account for direct bill commissions deposited via Receipts that have not yet been applied to particular items/statements.

Direct bill deposits not yet associated to a reconciliation statement.

Direct Bill Commission Receivable

Asset

Title

If Direct Bill commission income is recognized on an accrual basis, the Direct Bill Commission Receivable and Direct Bill Income required accounts are offset when the transaction is created (invoiced or via record commissions).

If recognized on a Cash Basis, no system generated journal entries are created when the transaction is created. Use the Cash on Account (Direct Bill Suspense) workflow in this situation.

The amount of direct bill commissions due from carriers based on items invoiced but not yet paid (reconciled as commission received).

Direct Bill Income

Income

Title

Note that Agency Bill Income and Direct Bill Income can be the same account if desired. The system automatically generates subaccounts based on the various Income Posting Breakdown methods. 

Earned direct bill income from Account Current, Company Fee, and Company Tax Direct Bill transaction classes (on accrual basis, all Transactions. On cash - partial or cash - fully paid basis, only paid items).

Income Earned this year.

Discounts Taken

Expense (carries a credit balance, so this is a contra-account)

Regular

If paying with vouchers and claiming a discount for early payment, the discount is moved from voucher payables to discounts taken when the voucher is paid.

Total discounts claimed for the year.

Government Payable

Liability

Title

Taxes and fees due to government payable entities. A subaccount is generated for each vendor installed as a government entity.

Total of government tax/fee transactions that have not been paid in Government Payables Reconciliations.

Interagency Broker Premium Payable

Liability

Title (subaccount is created/used per Agency)

Premium payments due to internal premium payable brokers (premiums due to another agency in the organization)

Remaining amount of premiums due to internal agencies (payment of premium payable statement should be made against this account).

Interagency Broker Premium Payable Write-Off

Liability, Income, or Expense

Title

Premium payable balances written off for an internal broker.

Premium payables written off.

Interagency Broker Premium Receivable

Asset

Title (subaccount is created/used per Agency)

Premium payments due from other agencies in the organization

Premium payments due from other agencies within the same organization (the balance in each subaccount indicates the amount due from each other agency).

Interagency Commission Payables

Asset, Liability

Title

Commission payables due to other agencies within the same organization (payables due to an internal broker who is a broker payable for that transaction)

Remaining commission payables due to other agencies within the same organization (broker commission payments for internal brokers should be made out of this account).

Interagency Commission Payables Write-Off

Liability, Income, or Expense

Title

Interagency commission payables written off for a particular structural organization. Only applies if system is configured to reconcile brokers (see System Settings).

Interagency commission payables written off.

Interagency Commission Receivables

Asset, Liability

Title

Commission receivables due from other agencies within the same organization (this agency was the internal broker payable on a transaction from another agency).

Total commissions due from other agencies in the system for transactions where the agency is a commission payable broker on the transaction.

Interagency Deferred Broker Premium Payable

Liability

Title

Internal Premium Payable Broker Payables deferred if installment revenue is recognized immediately but the premium payable broker is paid on an installment basis.

Premiums that will come due for future installments for which revenue has already been recognized.

Interagency Deferred Commission Payables

Liability, Asset

Title

In a commission sharing situation, this account is used rather than Deferred Broker Payables if the primary agency defers broker payables (until the receivable is paid). Broker (internal) Commissions deferred that will be due to other agencies within the same organization (i.e. Invoiced but not yet due for a cash basis broker.

Commission payables to other agencies within the same organization that have been invoiced but not yet paid.

Interagency Deferred Commission Receivables

Asset, Liability

Title

Same as Interagency Deferred Commission Payables, but for the receiving agency (internal broker). Broker (internal) Commissions deferred and not yet due from other agencies within the same organization

Commission receivable from other agencies within the same organization that have been invoiced but not yet paid.

Interagency Payables

Liability

Title

Applied Epic also allows you to pay carrier statements on behalf of another agency. If Agency 1 pays a statement for Agency 2, Agency 2 has an interagency payable to Agency 1 and Agency 1 has an interagency receivable to Agency 2. Payables due to another agency within the organization because that agency paid a statement on behalf of the original agency.

Amount paid by the subaccount agency that is still due.

Interagency Receivables

Asset

Title

Note that interagency payables/receivables are kept separate from interagency commission payables/receivables. Receivables due from another agency within the organization because this agency paid a statement on behalf of the other agency.

Amount paid by this agency still due from the subaccount agency.

Premium Payable Cash On Account

Asset

Title

This is a holding account for premium payable balances deposited via Receipts that have not yet been applied to particular items/statements.

Premium payable deposits not yet associated to a reconciliation statement.

Producer Commission Expense

Expense

Title

Recognizing the producer commission expense.

Remaining amount of premiums due to producers (payment of producer commissions should be made against this account).

Producer Commission Payable

Liability

Title

Recognizing the producer commission payable (each producer has their own subaccount)

Remaining amount of premiums due to producers (payment of producer commissions should be made against this account).

Producer Commission Payables Write-Off

Liability, Income, or Expense

Title

Producer commission payables written off for a commissionable producer. Only applies if system is configured to reconcile producers (see System Settings).

Producer commission payables written off.

Retained Earnings

Equity

Regular or Subaccount

When the year is closed, the net income/expense is automatically moved to Retained Earnings via the year-end journal entry.

Value added to the agency (income minus expense).

Sharing Expense

Expense, Income

Title

Commission payments due to other agencies or to structural entities within the same organization.

Commission payments due to internal premium payable brokers.

Total expenses this year for broker commissions due to other agencies within the organization (balance in each subaccount is the total expense for each other agency).

Sharing Income

Expense, Income

 Title

Commission income from other agencies or to structural entities within the same organization.

Commission income where this agency is set up as an internal broker and installed as a broker payable.

Total shared commission income this year from other agencies within the organization (balance in each subaccount is the total income from that agency).

Transfer Account

Asset

Regular or Subaccount

"Pass-through" account for Transfer of Funds and other pass-through scenarios

If there is a balance, something has gone wrong. The transfer account is automatically used in three areas: Transfer of Funds (deposit and payment file at the same time), GL Opening Balance month-end journal entry (transfer and accounts receivable are debited and credited in the same journal entry), or if month-end has an out of balance entry, the remaining debit or credit is posted to the transfer account and a warning message is posted.

Undeposited Funds

Asset

Regular or subaccount

Holding account for suspended receipts. Applied Epic allows you to “suspend” a receipt. While the receipt is suspended, the deposit does not affect the bank account but instead offsets Undeposited Funds.

Balance of suspended receipts not yet finalized

Voucher Payable

Liability

Regular

When you create a voucher, the Voucher Payable account is used. When the voucher is processed into a disbursement, this amount is transferred to the bank account (and potentially also to the Discounts Taken required account.)

Total amount of unpaid vouchers.