To access the “Sales” or “Purchase” ledgers, starting from the “Accounts Menu”…
If you’re using one of the insurance-related versions of Durell most of your invoices will be created automatically. But even with an insurance-related system you’ll still need to be able to enter manual purchase invoices for electricity bills, rent, entertaining and so on. To create such an invoice…
If you have an insurance-related Durell system, such as “Financial Adviser” or “General Broker” then all of your insurance related invoices will be created automatically (i.e. all those to the policyholder, insurer and any pay-aways to advisers and business introducers). You simply click the “Next screen” button (i.e. black bent arrow) throughout the policy’s details until you reach a screen at the end, with a small window in the centre entitled “Policy Post to Accounts”, with the option “Post to the accounts immediately” already selected, so all you have to do is to click the “OK” button. The way automatic policy invoices are generated (e.g. what nominal account to use, etc) is controlled by the system’s “posting defaults” (see “Accounts, Set-up Posting Defaults”).
Each invoice has three main descriptors, the first for the Name (e.g. the supplier, insurer or client), then two more, which might be used for Policy holder and Policy number in the sales ledger, and for Item/policy and Who in the purchase ledger. Having two extra descriptors can be useful on insurance-based systems where you need to know the insurer, policyholder and policy number. It can also distinguish who was the client involved in a pay-away to a sales adviser (e.g. Name=Adviser, Item/policy=Policy ref, Who=Client), or where items are purchased by credit card (e.g. Name=Credit card, Item=Item purchased, Who=Retailer). Also if you’re buying items for resale, it can help if you know for whom you’ve bought the item, as well as the name of the supplier. Because in many instances the “Name” and the “Who” or “Policy holder” may be the same, there is an “=” button next to the first descriptor that will copy the “Name” into it (see “Accounts, Set-up Preferences”).
Customer order number applies to sales invoices, while the supplier invoice number applies to purchases. You don’t have to enter anything in either of these fields, though it is good practice to enter purchases initially as orders with a blank invoice number, then when you receive a real invoice from the supplier, to convert them into invoices with the supplier’s invoice number in this field.
The invoice date is very important. For purchases you should copy the date on the supplier’s invoice (sometimes called the “Tax point date”). For sales you should enter the date of the actual sale. If you do this correctly your Profit & Loss and other reports will show what business you did in each month. Things typically go wrong when a batch of invoices is entered retrospectively, for example three months late. The system will default to (i.e. automatically suggest) today’s date for each new invoice, which if not corrected, will result in the entire batch appearing in the same month, with no business at all in the preceding three.
Select “File / Print / Invoice / Summary” if you don’t want units and unit prices appearing on your invoice (e.g. for insurance related business). Only use the “Detailed” option where you want to see the units (e.g. 5 hours consultancy @ £75 per hour).
The extent to which you’ll be able to analyses your business will depend on the number of nominal accounts you set-up initially. For example, if you just have one for “Life commission” you’ll know your overall turnover, but won’t be able to tell how much you earned from different types of business, for example, “Life, Pensions”, “Life, Term Assurance”, “Life, Investments”, etc (see “Accounts, Set-up Nominal Accounts”). To pre-set your system with nominal accounts see “Accounts, Set-up Account Sets”).
The purchase ledger is a mirror image of the sales ledger, but used for purchases instead of sales. Note that sales and sales credits (i.e. negative sales) go in the sales ledger, while purchases and purchase credits (i.e. negative purchases) go in the purchase ledger.
An adviser pay-away is just like any other purchase invoice, except that if your Durell system is insurance related (e.g. “Financial Adviser” or “General Broker”) then the system will automatically generate these for you. Should you need to create one manually…
Name = Adviser
Item/Policy = Fee work or policy number
Who = Client or policy holder
Invoices for life and investment commission due from insurers should be entered in the sales ledger. Clawbacks for these are also entered in the sales ledger, but as sales credits.
The situation is more confusing for general insurance brokers. Where policies are sold by direct debit, only the commission is due to the brokerage from the insurers, so this goes in the sales ledger, just like life assurance commission. Commission clawback for unpaid premiums or mid term adjustments also goes to the sales ledger, as sales credits, again just like life assurance.
However where a brokerage sells policies by cheque the invoices to the clients (possibly covering commission, net premium, management charges and tax) go in the sales ledger, while the purchases of net premiums from the insurers go in the purchase ledger. Hence a general broker’s account with any one insurer may include items in both the sales ledger (i.e. direct debit cases) and the purchase ledger (i.e. cheque cases).