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Friday, July 29, 2005

Customer Insurance Payments.


We are an insurance company and are setting up QuickBooks for the first time. In some cases the insurance company we are placing the business with will not accept customer check. We write the insurance company a check and the customer writes us a check. We are unsure how to enter these transactions into QuickBooks as they are not income or expenses. They just wash each other out. Thanks for the help.


This is a very common question in your industry. The way that I have my clients set this up is as follows:

1. Set up a new current liability account named "Insurance Transfer Account" or something similar.

2. Set up a new invoice item named "Customer Premium Payment" classify it as an "Other Charge" and have it post to the account that you created above.

3. Receive the payment and deposit it just as you would any other invoice item.

4. When you pay the insurance company on behalf of your client, put the Insurance Transfer Account as the expense on the check expense section.

This has worked very well for several clients who are in this industry. You can always check the amount that you have in this account by looking at the current balance sheet.

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