Understanding How Momentum AMS Transactions Sync to QuickBooks

Momentum AMS and QuickBooks Work Together

The purpose of the QuickBooks integration is to help eliminate duplicate accounting entry.

Premium accounting activity—including receivables, payables, payments, commissions, fees, and financing—is recorded in Momentum AMS. When transactions are synchronized, Momentum creates the corresponding journal-entry activity in QuickBooks using the accounts configured in your QuickBooks mapping.

QuickBooks can then be used by your accountant or bookkeeper for financial reporting, bank reconciliation, and comparison against the accounting records maintained in Momentum.

Understanding Debits and Credits

QuickBooks uses double-entry accounting. This means each accounting transaction affects at least two accounts.

When Momentum synchronizes a transaction, it creates journal entries containing the appropriate debits and credits based on the transaction and your agency's QuickBooks mapping.

You do not need to manually recreate those journal entries in QuickBooks. They are generated from the accounting activity recorded in Momentum.

Example: Booking an Agency Bill Premium

Consider an Agency Bill policy with a $10,000 premium.

When the premium is booked, two important accounting obligations are created:

• Accounts Receivable represents the amount that needs to be collected.
• Accounts Payable represents the amount the agency is responsible for remitting to the carrier, MGA, or other company.

At the beginning of the transaction, the premium therefore affects both Accounts Receivable and Accounts Payable.

The Three Stages of an Agency Bill Transaction

An Agency Bill transaction generally moves through three primary accounting stages:

1. Book the transaction – The premium creates the appropriate receivable and payable activity.
2. Receive the payment – The payment is recorded and the outstanding receivable is reduced.
3. Pay the carrier or MGA – The outgoing payment reduces the corresponding payable.

As each stage is completed in Momentum, the resulting accounting activity can be synchronized to QuickBooks.

Receiving Payment from the Insured

When payment is received and recorded in Momentum, the Accounts Receivable created by the original transaction must be reduced.

The payment also needs to be represented in the account configured to receive those funds in QuickBooks.

Depending on your agency's accounting configuration, Undeposited Funds may be used as part of this process before funds are included in the appropriate QuickBooks bank deposit.

Paying the Carrier or MGA

After the agency has collected the premium, the amount owed to the carrier or MGA must eventually be paid.

When that payment is recorded, the corresponding Premium Payable balance is reduced.

This completes the basic Agency Bill accounting cycle:

Premium booked → Payment collected → Amount owed to the company paid.

The journal entries synchronized to QuickBooks represent each stage of that accounting activity.

How Agency Bill Commission Affects the Transaction

Agency Bill commission can reduce the amount ultimately payable to the carrier or MGA when the agency is permitted to retain its commission.

For example, the insured may owe the full premium while the agency remits the premium less its commission to the company.

In that situation:

• The full amount due from the insured remains part of the receivable.
• The amount payable to the company is reduced by the agency commission.
• The retained commission is recognized through the agency's designated commission income account.

Momentum uses the QuickBooks mapping to determine which accounts receive this activity when the transaction is synchronized.

Taxes and Policy Fees

An Agency Bill transaction may contain more than premium. It can also include items such as taxes and policy fees.

These amounts can be mapped separately in Momentum when the agency wants them represented in different QuickBooks accounts.

Alternatively, some transaction types may use the same general receivable and payable accounts when separate reporting is not necessary.

The accounting treatment should be based on your agency's Chart of Accounts and accounting practices.

Agency Fees

Agency fees are different from amounts that must ultimately be remitted to a carrier, MGA, or other company.

When an agency fee belongs to the agency, it can be recognized through an appropriate income account rather than creating an amount payable to a company.

The fee may still create a receivable because the customer owes the agency the amount. Once collected, the receivable is reduced.

Premium Financing

Premium financing can change the normal accounting flow because the finance company may provide some or all of the funds associated with the premium.

Depending on the financing arrangement, the agency may need to account for:

• An amount receivable from the finance company.
• A reduction to the amount receivable from the insured.
• The amount payable to the carrier or MGA.
• Funds received from or returned to the finance company.

Momentum provides QuickBooks mapping options for these transactions so the resulting journal entries can be directed to the appropriate accounts.

Direct Bill Commissions

Direct Bill commissions can also be synchronized to QuickBooks when the agency chooses to include them in its QuickBooks workflow.

The accounting flow can include:

• A Direct Bill commission receivable.
• Commission income.
• The receipt of the commission payment.
• The reduction of the commission receivable once payment is received.

Producer Commissions

Producer commissions can introduce additional expense and payable activity.

When producer commission is recognized, it may create:

• A commission expense.
• A commission payable to the producer.

When the producer is paid, the corresponding payable is reduced.

Some agencies may choose to handle producer commission activity in aggregate rather than synchronizing individual producer commission activity for every policy transaction.

Reviewing the Results in QuickBooks

After transactions have been synchronized, the resulting journal entries can be reviewed in QuickBooks.

Two important financial reports can help verify the results:

• Balance Sheet – Helps review balances such as Accounts Receivable and Accounts Payable.
• Profit and Loss – Helps review income and expense activity such as commission income and commission expense.

These reports can be compared with the corresponding accounting information in Momentum AMS to help identify discrepancies.

Start with Manual Synchronization

QuickBooks synchronization should be tested before an agency relies on an automated workflow.

Begin by synchronizing transactions manually and reviewing the resulting journal entries in QuickBooks. Confirm that receivables, payables, income, payments, fees, and other activity are being directed to the expected accounts.

During testing, make sure your agency understands how to:

• Synchronize a transaction.
• Review the resulting journal entries.
• Identify incorrect mapping.
• Correct or reverse transactions when necessary.
• Reconcile QuickBooks against Momentum AMS.

Once the workflow has been tested and the agency is comfortable with the results, additional synchronization options can be considered.