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Accounts, Cashbook, Reconciling (Insurer and Adviser Accounts, etc)

“Reconciling” is the process of matching Sales and Purchase Ledger invoices against a Cashbook payment or receipt (e.g. a £500 Cashbook receipt to settle Sales invoices No.54548 and No.98743).

Typically the sum received or paid will be to settle all (or most) of the invoices owed to, or by, a given “Name” (e.g. for all the commission due from Axa, or for all the pay-aways you owe to Jane Potter). This is often referred to as “settling an account”, for example, settling the Axa insurer account, or settling a given adviser’s account. A client, supplier, insurer, or adviser account comprises…

  • all sales ledger invoices and credits regarding that person or organisation
  • all purchase ledger invoices and credits regarding that person or organisation
  • all cashbook receipts and payments regarding that person or organisation
  • In the example below, if you have outstanding sales invoices due from one of your insurers for £398.76, but also owe that insurer £502.20 for net premiums and sales credits, then the overall position is that you actually owe the insurer £103.44. So be aware that an overall “account” may be very different from the position viewed just from a single Ledger. To this end you are strongly advised to print a “Statement” before reconciling an account, as this will always give you the complete picture, as illustrated below (see also “Accounts, Reports, Statements”).

    To reconcile an account, first enter the sum received or due to be paid, as described in “Accounts, Cashbook, Receipts & Payments”, then click the “Reconcile” button, as shown below.

    However, before describing the “Reconcile Account for…” screen, below, please note that there are actually three ways to get to it. You can…

    1. Start a new Cashbook receipt or payment, as shown above, then click the “Reconcile” button
    2. Click on an existing Cashbook receipt or payment that is not yet reconciled (i.e. no red “cross”), double-click it to check or edit the details, as shown above, then click the “Reconcile” button
    3. Click on an existing Cashbook receipt or payment that is not yet reconciled (i.e. no red “cross”), then click the “Pile of Money” button on the toolbar

    Reconciling a Client, Customer, Adviser, Network or Insurer’s Account

    On the “Reconcile Account for…” screen, shown above, note the following….

  • To reconcile a Network’s statement (where the screen initially appears empty) click the “Signpost” button, then click “Include all outstanding SALES invoices”
  • If you think any items are missing you can check for them by clicking the “Signpost” button, then clicking “Include all outstanding…”, as appropriate
  • You may optionally click the green “Binoculars” button to re-sequence the listed items in order of date, policyholder, policy number or invoice number
  • In the case of a very large account, note that you can also use the green “Binoculars” button to search for a given item
  • The full details of the currently highlighted line are given at the bottom of the screen
  • There are yellow “smiley” and white “grumpy” faces at the right of the screen, which signify the following….
  • o Yellow “smiley” faces indicate that the associated client has already paid his premium

    o White “grumpy” faces indicate that the associated client has not yet paid his premium

    o No face indicates the business was by direct debit, or similar, and therefore not subject to the client paying the brokerage

  • When making a payment (e.g. to Axa) then any sums owed to you (e.g. by Axa for commission) will reduce the amount you owe, and hence appear as negative values
  • When receiving a sum (e.g. from Axa) then any sums that you owe (e.g. to Axa for net premiums) will reduce the amount you are due to receive, and hence appear as negative values
  • The total sum to be reconciled is displayed at the bottom-right of the screen in the “Cashbook” field
  • The amount reconciled so far is displayed at the bottom-right of the screen in the “Reconciled” field
  • The amount still to be reconciled is displayed at the bottom-right of the screen in the “Balance” field
  • Don’t worry if, during the reconciliation process….
  • o you reconcile a line incorrectly. Simply click the yellow “Bin” button (i.e. to delete its reconciliation) and that line will return to its original state

    o you realise the total amount to be reconciled will differ from what you originally entered in the Cashbook, as on exit you’ll be prompted to adjust it accordingly

    o you notice some invoices are missing….

  • either click the “Signpost” button then jump to the Policies or Ledger and create the missing invoice/s, then “Exit” to return to the reconciliation
  • or click the “Exit” button twice, add the invoices in the Ledgers, then return to the Cashbook and re-commence where you left off
  • Also, before proceeding with the help below, please note that the above displayed account includes…

  • two items for Constable T that cancel each other (i.e. a plus £316.20 and a minus £316.20, probably because he cancelled his policy before going on risk)
  • two other negative sums (without “faces”, which indicates that they are for commission paid by direct debit), which therefore reduce the amount due to be paid to Axa
  • one true premium to be paid to Axa (i.e. of £186.00 for Aaron F), which has a lower value than the overall outstanding amount due (i.e. £103.44)
  • So to reconcile the account, proceed as follows, and as far as possible always select the negative values first…..

  • To remove the two Constable T items that cancel each other… 
  • o Double-click the negative Constable T item (i.e. for - £316.20), and then click the “OK” button

    o You’ll be warned that this “white grumpy face” item hasn’t been paid for by the client, as shown below, which in this case is OK, so click “Yes” to proceed regardless

    o The “Balance” to be reconciled will be increased to £419.64 (i.e. £103.44 + £316.20)

    o Double-click the positive Constable T item (i.e. for + £316.20), and then click the “OK” button

    o The “Balance” to be reconciled will revert back to £103.44

  • To accept the Aaron GV and Pudd P commission items due from Axa (and thereby reduce the total amount you need to pay Axa – so they are shown as negatives)
  • o Double-click the negative Aaron GV line for -£49.56 and then click the “OK” button

    o Double-click the negative Pudd P line for -£33.00 and then click the “OK” button

    o The overall screen will now look like that shown below. Note the changes to the “Due”, “Reconciled” and “Balance” columns, plus the “Balance” still to reconcile at the bottom right

  • Finally, to include the £186.00 for Aaron F in your payment to Axa…
  • o Double click the Aaron F line and then click the “OK” button

  • Click the “Exit” button to leave the “Reconcile Account for…” screen
  • Back at the Cashbook screen, click “File / Print / Remittance” to print a remittance advice note to go with your payment
  • See also “Accounts, Cashbook, Reconciliation Adjustments”.