Binder Bill Transactions

Binder bills are used to generate invoices before the insurance company actually issues the policy. A binder bill transaction starts the accounts receivable process without incurring liability to the company.

• Open binder bills do not appear in Reconciliations.
• Open binder bills may optionally appear on the Account Current Report.
• Open binder bills earn commission based on agency setup for agency bill income.
• Binder bills age from the original transaction.
• You can binder bill customers, brokers, or lienholders.
• You can binder bill installments.
• You cannot finance a binder bill (FIN or CFN).
• You cannot binder bill a user-defined transaction.
• You can binder bill certain transaction types only: +EN, -EN, AUD, CAN, CFE, NEW, REN, REW (and NIS and RIS for installment plans).

Add a Binder Bill Transaction
Close a Binder Bill Transaction
How Binder Bill Transactions Affect the General Ledger
Binder Bill Installment Transactions
Process Pending Binder Bill Transactions
Balance Binder Bill Payables

Add a Binder Bill Transaction

1. At Home Base, click Clients & Files.
2. From the dropdown list, select Customers.
3. Select the customer and click the Invoices button.
4. Click the Add button below the button bar and select Add a Transaction.
5. Select the type of transaction you want to enter (General, Installment Plan, or Custom Installment Plan) as well as the policy the transaction is for. If the policy is not a direct bill policy, the Binder Bill checkbox is enabled.
6. Check Binder Bill.
7. Complete the transaction as usual. It files in Binder Bill mode. 

Close a Binder Bill Transaction

1. At Home Base, click Clients & Files.
2. From the dropdown list, select Customers.
3. Select the client and click the Invoices button.
4. Click Add and select Update Transactions.
5. In the Transaction List window, select the Open Binders radio button.
6. From the Options menu, select Close Binder.
7. Select one of the following three options:
   • Close Binder; Create Adjustment; Summary Invoice: This option allows you to make changes, such as the amount, commission, etc. The new account current transaction created in this process includes this information.
     
     If you make changes, the following prompt appears: Do you wish to apply the changes to the current policy screen? Select 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 includes the transaction date and the due date of the original binder. If you make a change to the amount, a MEM transaction is generated for the difference between the original binder and the account current item. The MEM prints in Close-Day.
   • Close Binder, Create Adjustment - Detail Invoice: This option allows you to make changes, such as the amount, commission, etc. The new account current transaction that is created in this process includes this information.
     
     When you select this option, the following prompt appears: Do you wish to attach reversing credit to rebilled items? Select Yes to apply the reversing binder amount to the account current item. The original binder remains open on the aged receivables report if it has not been paid. Select No if you do not want to apply any credits or debits to the items involved.
     
     If a change has been made, the following prompt appears: Do you wish to apply the changes to the current policy screen? Choose either Yes or No. The account current item includes the current transaction date and due date. If a change was made to the amount, no MEM is generated. The reversing binder and the account current transaction both print in Close-Day.
   • Reverse Binder - Reinvoice Manually: This option creates a reversing binder bill entry. An account current item is not generated, nor are the items applied to each other. The reversing binder prints in Close-Day.

How Binder Bill Transactions Affect the General Ledger

When a binder bill transaction is created:

• The Accounts Receivable Total Premium is debited.
• The Binder Bill Payable the Net Premium is credited.
• P & C or Unearned Commission Income relative to agency setup is credited.

When a binder is closed, the reversing binder:

• Credits Accounts Receivable Total Premium.
• Debits Binder Bill Payable the Net Premium.
• Debits either P & C or Unearned Commission Income.

When a binder is closed, and either Summary or Detail is selected, the production transaction:

• Debits Accounts Receivable Total Premium.
• Credits the appropriate Company Payable the Net Premium.
• Credits P & C or Unearned Commission Income relative to agency setup.

Binder Bill Installment Transactions

Binder billed installment transactions work basically like regular installments. They are entered 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.

Close a Binder Bill Pending Installment

1. At Home Base, click Clients & Files.
2. From the dropdown list, select Customers.
3. Select the client and click the Invoices button.
4. Click Pending.
5. Select the binder bill transaction you want to close.
6. Click Detail.
7. Click the Binder Bill Status box in the upper right corner to remove the X, thus undoing the binder bill status.
8. Update the remaining installments as necessary.

Process Pending Binder Bill Installments

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 display with a b next to them in View Transaction History. When processed, the GL is affected in the same manner as a binder bill that is not an installment: debits Accounts Receivable, credits Binder Bill Payable, and credits Commission.

In Addition

• Never close a binder bill for $0.00.
• In the Transaction History report, an uppercase B displays to the right of a closed binder. A lowercase b indicates an open binder.
• A B or a b should never display on an internal transaction or a writeoff (e.g., CRI, DBI, JE2 etc.).
• In the transaction list, the side view shows the binder bill as O when it is open and C when it is closed. The reversing binder bill transaction also shows binder bill as a C for closed.
• When a binder bill is created, it files with a Y in the Company Paid field, as it is not payable to the company. 

Balance Binder Bill Payables

The Binder Bill Payables account can be balanced using the Binder Bill Payables Balancing report found under the General Ledger section in Reports.