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hkg48035
December 9, 2022
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Insurance reimbursements on customer claims

  • December 9, 2022
  • 2 replies
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We had a customer make a claim against us that our liability insurance covered. However, the insurance company sent the check to our company. We deposited it into our business account then turned around and wrote Our Own check for the same amount to the client to settle the case. I need to understand which accounts to post against in the books regarding the insurance payout.

Best answer by Rainflurry

@hkg48035 

 

Create an 'Other Current Liability' account called Insurance Claim Payable or something similar.  Then, deposit the funds to that account.  When you write a check to the customer, use the same account.  This properly records the funds as a liability when received and a reduction in the liability when paid to your customer. 

2 replies

Rainflurry
RainflurryAnswer
December 9, 2022

@hkg48035 

 

Create an 'Other Current Liability' account called Insurance Claim Payable or something similar.  Then, deposit the funds to that account.  When you write a check to the customer, use the same account.  This properly records the funds as a liability when received and a reduction in the liability when paid to your customer. 

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    hkg48035Author
    December 9, 2022

    This sounds like the right solution. The payment was actually made back out to the company that did the repairs for the customer. we are a home inspection business, and before the customer purchased the house, a damaged chimney was missed in the report. So, the customer went through their vendor for the repair reimbursement. Since it is the customer's vendor not ours, how would you recommend setting them up as we had to write the check to them, not our original customer.

    MorganB
    MorganB
    December 9, 2022

    Good morning, hkg48035.

     

    Thanks for brining your question forward here in the Community. I'd be glad to point you in the right direction regarding insurance reimbursements.

     

    In this instance I recommend consulting with your accountant to be sure of the next steps to take. They'll be able to tell you exactly which accounts to post the insurance payouts in. If you don't currently have an accountant, you can find one in your area specifically trained in QuickBooks with a quick search on the ProAdvisor site.

     

    If you need any assistance with the entry afterward, please don't hesitate to reach back out!

    H
    hkg48035Author
    December 9, 2022

    if we could afford an accountant, lol. sorry, we are a 2 person show and doing fine tax wise with everything.

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