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…
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…
On the “Reconcile Account for…” screen, shown above, note 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
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….
Also, before proceeding with the help below, please note that the above displayed account includes…
So to reconcile the account, proceed as follows, and as far as possible always select the negative values first…..
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
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
o Double click the Aaron F line and then click the “OK” button
See also “Accounts, Cashbook, Reconciliation Adjustments”.