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grozaconsulting
January 8, 2022
Question

Should I set up an account for insurance pre-payments?

  • January 8, 2022
  • 1 reply
  • 0 views
I have HOA owners who send additional funds with their monthly payment as a "savings" account for their insurance at the end of the year. When the master invoice comes in, I create an invoice in QB for their respective amounts and apply those prepaid credits to their invoice. This has thrown my income, unapplied cash payments, and insurance expense out balance. I'm really struggling to clear this up for this year. Any suggestions? Would setting up an escrow accounts take care of this year end issue? Help!

1 reply

KimMcCPA
KimMcCPA
January 8, 2022

@grozaconsulting ,

 

Sounds right... when a company is a temporary custodian of funds that do not belong to that company (ie, these funds are not income), an escrow account (which is an Other Current Asset, not a liability) is usually appropriate. 

 

In QBO, the product/service entries on an invoice affect the accounts they are assigned to.  In addition to creating an escrow account, set up a product/service that is assigned to the escrow.  From there, I would change one invoice, edit to use that new product/category, save, then pull a report that is a mess... see if you're headed in the right direction.

 

Super 2022 to you!

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