General Insurance, Payment Methods & Date
On the “Premium Details” screen, shown below, the three “Paid by”, “Method” and “Date” payment fields will default to whatever values you chose on the “Posting” tab of the screen for “Set-up, General Insurance”.
In the “Payment” section you can select any type from the “Paid by” drop-down, as this is for information only, and has no impact on the system. The types of payment can be set-up via the following, starting from the Main Menu… Click the “Accounts” button Click the “Setup” button Click the “Payment Methods” tab Click the “Starburst” or “New” button to start a new payment type Enter its short name (e.g. DD) and long name (e.g. Direct Debit) then click the red “Floppy Disk” or “Save” button
In contrast to “Paid by” it is very important that you select the payment “Method” carefully, as this controls the way sums are posted to the accounts. Most of the time you’ll probably use the “CH” and “DD” methods, with the “F1..F5” methods for finance, and the “IN” one for instalment business. The methods are as follows…
- CH – Cheque, cash, etc, paid to brokerage (nett premium method). In this case the client pays the brokerage (by any payment type, including cheque, cash, credit card, standing order, etc) and the brokerage then forwards the nett premium plus IPT to the insurer.
- DD – Direct debit to insurance company (commission-only method). In this case the client pays the insurer (by any payment type, including cheque, direct debit, standing order, credit card, etc) and the insurer then returns the commission element to the broker.
- PR – Parent policy controls payment & renewal, so no premium details. This should be used where no accounts posting is required from the policy in question, probably because its premium has already been included in an associated policy.
- IN - Instalments by client to broker, all else as lump nett prem (CH). Technically this behaves exactly the same as the “CH” method, as any method can actually be settled via instalments. However you are recommended to use the “IN” method when dealing with instalments so that (a) it’s more obvious and (b) the system can automatically invoice your source of finance (e.g. Premium Credit), via its “Posting Defaults” as described below (see also method F1 to F5).
- AG – Agency method, as nett prem (CH) but invoiced to introducer. Like “IN” above, technically this is exactly the same as the “CH” method, except that again, via its “Posting Defaults” as described below, the invoice can be addressed to an agent or introducer instead of the client. You should use this where a sub-brokerage buys insurance from you (i.e. where you invoice the sub-broker, then the sub-broker invoices his own client).
- CO – Collection, as nett prem (CH) but all to insurer who returns comm. Companies such as BUPA use this method where the entire premium is collected by the broker and forwarded in full to the insurer, who subsequently returns the commission element.
- CI – Co-insurer, no invoice to client. This is identical to the “CH” method except that no invoice is raised for the client. This should be used for co-insurance situations, such as shipping, where one company insures the vessel, a second the cargo and a third insures the public liability. Each of these should be entered as a separate policy, for which the premiums can then be invoiced to the separate companies (see also CC, below).
- CC – Co-insurer, no invoice to insurer. This is the other half of the “CI” method. In the shipping example, described above, it would be used for the client’s policy, that would refer to all three insurers and the aspects covered by each, though only the client would be invoiced. This would need to be done via Durell’s group scheme facility, with the client policy set-up as the group header, so that the system could automatically accumulate the various premiums from the insurers’ policies into the single client one (i.e. the scheme’s group-header policy).
- F1 to F5 – Finance, as nett prem (CH) but invoiced to a source of finance, such as Premium Credit. Technically this is exactly the same as the “CH” and “IN” methods, except that, via its “Posting Defaults” as described below, the invoice can be addressed to a number of finance sources instead of the client (i.e. F1 for finance source 1, F2 for source 2, etc). You should use this where a finance company pays the premium to the brokerage on behalf of a client. Use F2 if you have a second finance source, and so on up to F5.
Click the “=” button to the right of the “Invoice or first instalment date” field and an “Invoice Date” dialogue will appear. Select whether to invoice the policy on its “On-risk date” or “Today’s date” then click the “OK” button. This is just a matter of choice that makes no difference to the system. Using the “on-risk date” will align your accounts with your policies, while “today’s date” will align your accounts with the amount of work processed each day.
“Posting Defaults” control your accounts invoices. For example, they control to whom an invoice should be addressed and which nominal accounts should be used (e.g. for the premium, commission and charges). Some standard “Posting Defaults” are supplied with your system, which can be adjusted with Durell’s help to suit your particular needs. You should not attempt to set-up or edit “Posting Defaults” without the help of an experienced Durell technician, as this is a very complex area, which profoundly affects your accounting system.
For further information see “Accounts, Set-up Posting Defaults”.