Applied Epic’s accounting features introduce a range of terms that may vary from traditional accounting vocabularies or those in other agency management systems. For agencies newly adopting Epic for their accounting practices, unfamiliar terms can lead to uncertainties regarding process accuracy. To assist, we’ve provided a list of commonly used words and phrases in Applied Epic as they relate to various accounting workflows. Use this as a guide to help clarify any ambiguities in your agency’s accounting procedures.
Applied Epic Accounting Glossary of Terms
Configured based on how agency recognizes income and pays producers/brokers.
- Cash – Agency recognizes income when it is received.
- Accrual – Agency recognizes income when policy is billed/transacted.
- Partially Paid – Agency pays producers/brokers when partial commission is received. This would include installments (either Direct or Agency Bill) or client down payments.
- Fully Paid – Agency pays producers/brokers when full policy commission is received or when client pays premium or down payment in full.
Any money owed to the agency by a client or Finance Company for Agency Bill policies.
Policy premiums are paid to the agency by the client. The Agency retains their commission and forwards net premium and any applicable fees to the company/broker.
Applying Credits to Debits
Applying client payments and CFIN transactions to outstanding balances on client accounts.
Balance Sheet vs Income Statement
- Balance Sheet – A report that shows all Asset, Liability, and Equity GL balances. Assets equal Liabilities + Equity. These GL balances perpetually roll year-to-year.
- Income Statement – A report that shows all Income and Expense GL balances. At year end, net income moves to Retained Earnings on the Balance Sheet and all GL balances revert to $0 for the beginning of the new fiscal year.
CFIN vs Actions > Finance
- CFIN – Finance company pays the company/broker.
- Actions > Finance Transaction – Finance company pays the agency who then pays the company/broker.
Chart of Accounts
General Ledger (GL) accounts specifically coded for recording Assets, Liability, Equity, Income & Expense.
- Regular – GL account codes that do not require sub-accounts (i.e., Accounts Receivable, Bank Accounts, Sweep, Equity accounts)
- Title Accounts – Primary GL accounts that typically include Sub-Accounts (i.e., Income accounts, Payable accounts, Expense accounts)
- Sub-Accounts – Breakout categories for your Title Accounts by entity (Carriers, Brokers, Expenses, etc.)
Policy premiums are paid directly by the client to the company/broker. Company/Broker will forward commissions to the agency.
Direct Bill Commission Download
A way to receive commissions through IVANS which puts them into Download Suspense for processing to Direct Bill Reconciliations.
Direct Bill Download Suspense
Where downloaded commissions are waiting to be processed and recognized as actual transactions and income received to the agency.
- Receipts – Where deposits are recorded. This can be client payments, Direct Bill commission, miscellaneous income items, return premium, or money received from a Finance Company.
- Disbursements – Where agency payments are recorded, either electronically or by check. This could be Premium Payables, Vendor Payables, payroll, sweep payments, etc.
- Journal Entry (JE)– Created when you need to move balances from one GL account to another.
- System Generated Month-End Journal Entries (MJEs) – Configuration-driven Journal Entries that run automatically at month-end based off the completion of a specific workflow (Direct Bill Commission Receivable and Cash on Account Receipts tied to a Reconciliation, Invoiced Agency Bill items, Producer/Broker Commission Expense and Payable accounts).
- Manually Entered – Journal Entries agency creates to correct GL account balances, or as a second option to record transfers between bank accounts, payroll, credit card payments, etc.
- Reconciliations –
- Direct Bill – Where to record commissions agency receives for direct bill policies through Download, Import, or manual entry.
- Premium Payable – Where to pull in the transactions made on the client screen to pay net premium to company/broker. Creates a Disbursement when Finalized and Actions > Pay Statement.
- Pr/Br Payables – To reconcile commissions due to a producer/broker.
- Bank – To verify all activity entered in Epic matches activity in your bank account.
- Direct Bill Import – A way to record Direct Bill commission received through an Excel mapping file that contains criteria from the commission statement.
Issuing Company (ICO)
The company that underwrites the policy being written. Think of it as the ‘paper the policy is written on.’ The NAICs are configured to the Issuing Company, which ensures Download operates properly.
Any items the agency needs to pay.
- Vendor – Items owed to entities not related to policies. This can be agency expenses like electricity, rent, advertising, license renewals, loans, credit card, office expenses, etc.
- Premium Payables – Carrier invoices for clients with agency bill policies.
Premium Payable Entity (PPE)
This can be a company or broker and is the one who pays commission to the agency and who the agency pays for Agency Bill items. A PPE company can be the same as an ICO, but it is important to check the policy to ensure if there is a difference.
Status of Accounts (aka General Ledger) Report
A report that shows all GL account activity as debits and credits with beginning and ending balance for each GL account. In standard accounting, this report is well known as a General Ledger report.
To properly utilize the accounting reports (or any report) in your Epic system, you need accurate data. To help maintain accurate data it is crucial to understand accounting workflows in Applied Epic, including its various terms and phrases. If you have any questions on the terminology defined above, or on Epic accounting in general, do not hesitate to reach out to us at firstname.lastname@example.org. You can also visit our website to learn more about KiteTech’s Applied Epic Accounting and Outsourced Bookkeeping Services. Want to download and save this glossary as a PDF so you can easily refer to it as needed? Click here to download now. And be sure to check back next month for our next glossary of General Applied Epic vocabulary.