Instalment Policies - Clearing GST Prepaid Amounts (WinBEAT only)

Background

The WinBEAT Instalments module automatically treats Commission GST on instalment policies as ‘prepaid’ by paying the full GST up front. In effect Commission GST for instalment policies is financed by the Broker and is recouped over the 12 months of the instalment policy. The INSIGHT Instalment module accounts for both Commission and Commission GST as received from the insurer, typically monthly. INSIGHT records commission received from the insurer for each instalment period (via Instalment Receipts – Sunrise, SVU and Manual). As commission is recorded as being paid to the broker against an instalment period in INSIGHT (via instalment Receipts – Sunrise, SVU and Manual), INSIGHT then allocates this commission as income earned to the broker and makes its available for drawings (via Drawings, Income). INSIGHT also calculates the GST payable on this earned income and makes it available for drawings to be paid to the ATO (via Drawings, GST). When migrating instalment policies from WinBeat that have ‘prepaid’ Commission GST, we need a process to ensure that the ‘prepaid’ GST is refunded to the Broker at the time of drawings and not paid to the ATO. The procedure outlined below will allow the broker to draw income for all policies regardless of where they originated and in turn, draw GST that has been prepaid (WinBEAT originated transactions) and then draw GST owed to the ATO (INSIGHT originated transactions). 

Procedure

IMPORTANT: You will need to identify and list all instalment policies originated in WinBEAT for which you have ‘prepaid’ GST to assist in the drawing process detailed below.
 Your migration team will have created a clear difference in the invoice numbers to help
 you keep track. For example, all Imported Instalments will have invoice numbers starting
 at 100000, then any transaction processed live in INSIGHT will start with invoice numbers
 at 500000.

1. On the day you want to upload your Instalment Receipts files ensure you have first completed processing all manual, DEFT or BPAY receipts. 

2. Ensure you have processed both Income and GST Drawings BEFORE uploading any Instalment Receipts files 

3. Upload and process ONE electronic or manual Instalment Receipt file from an insurer 

4. Withdraw your earned income (via Drawings Income) that are available as a result of Step 3 

5. Withdraw your earned GST (via Drawings GST) for those instalment policies that relate to prepaid GST i.e. Instalment policies generated in WinBEAT prior to migration. 

IMPORTANT: These funds should be retained by the Broker to offset the prepaid Commission GST financed by the broker prior to migration. 

6. Withdraw your earned GST (via Drawings GST) on all remaining instalment policies. This should be for instalment policies generated in INSIGHT. These funds represent monies owed to the ATO on INSIGHT generated invoices. 

7. Repeat steps 5-6 until all instalment receipts for the month have been uploaded and processed (both manual and EDI)

Note

	Completing Steps 5 and 6 as separate steps will allow for easier accounting and reconciliation of GST that was prepaid in WinBeat but recovered in INSIGHT, versus  GST drawn in INSIGHT and due to the ATO.
	This process you will need to continue until all migrated ‘prepaid’ instalment policies  have been cleared.You will need to identify and list all instalment policies originated in WinBEAT for which you have ‘prepaid’ GST to assist in the drawing process detailed  below.

Disclaimer

Whilst this may resolve the processing of the GST received from the insurer for prepaid GST and GST monies owed to the ATO, we cannot advise if this is compliant with any GST obligations for managing the trust account. For this, it is recommended you speak with your accountant or compliance partner.