How to Record Insurance Claim Payment in QuickBooks?

Do you wish to learn about how to enter insurance claim payments in QuickBooks? You do not need to do much. You just need to set up a new account and then monitor the entry as well as the deposit that you intend to make.

In the present world, difficult tasks can be done by even those who are not trained. Thanks to the development in technology and software and QuickBooks is the most apt example of it. Entering insurance claim payment in QuickBooks makes life easier and simplifies complex tasks.

Let us first learn about payment for insurance.

What is Payment for Insurance?

In simple terms, a company’s liability insurance, property insurance, business interruption insurance, etc., often include a period of 1 year with the price (in the form of insurance premiums) paid in advance.

The period of one year for the insurance hardly overlaps with the accounting year of the company. Hence, the insurance payments are expected to include one plus annual financial statement and several interim financial statements.

Now when you know about insurance payments, let us learn about how to record insurance claim payments in QuickBooks.

How to Record Insurance Claim Payment in QuickBooks?

In order to record insurance claim payments, you need to make an account to monitor the activity and then do a deposit, with the help of the steps given below:

Step 1: Press the Accounting menu present on the left side of the panel. Now choose Chart of Accounts and then the All Lists page will appear.

Step 2: Click the New menu that is present on the upper right side in order to use the Account Window.

Step 3: Now, from here, select the account you wish to use by pressing the Account Type drop-down.

Step 4: Now, select the right category from the Detail Type drop-down.

Step 5: Add a term that will detect the account in the particular Name field.

Step 6: Add the remaining field boxes.

Step 7: Click the Save and Close button.

You can also input a manual transaction for the particular insurance claim you wish to record, with the help of the steps given below:

Step 1: Navigate to Transactions.

Step 2: Choose Add Transactions.

Step 3: Add the date, amount, and description of the particular insurance claim.

Step 4: In the Category and Tags section, press Select a Category.

Step 5: Choose Insurance.

Step 6: Select Business Insurance.

Step 7: Press Save.

Now when you know how to record insurance claim payments in QuickBooks, let us learn how to account for reimbursed funds in QuickBooks.

How to Register Insurance Reimbursement in Accounting?

Here are the steps to register Insurance reimbursement funds under the accrual accounting convention QuickBooks:

Step 1: Find out the amount of the proceeds for the property that is damaged. It is the fund sent by the insurance company to you.

Step 2: Find the entry done to register the repair cost. The particular amount can be authenticated with the help of a receipt. The line item is generally, Repairs from an impaired property.

Step 3: Debit the particular insurance proceeds to the Repairs account. The entry should be seen like the below:
Insurance Proceeds on Impaired Property: Debit Repairs for damaged property.

Step 4: Register a loss on the particular insurance settlement. Often the insurance company will offer you less in comparison to the amount you paid. It generally happens the net book value of the given property is greater than the money that is reimbursed.

In such a Case, Record the Entries as Loss on Insurance Settlement: Debit

Insurance Proceed on Damaged Property: Debit

Property Account: Credit, in case there is extra in the account, which is, the insurance company paid extra than the amount you paid, you add the following:

Insurance Proceed on Damaged Property: Debit the Property account and Credit the Insurance Settlement surplus.

We hope that this article was able to provide you with all the information concerning how to record insurance claim payments in QuickBooks.

We have pointed out all the crucial points in this regard and request you to go through each point minutely so that you do not miss out on anything important.

Still, if you find it complicated to record insurance claim payments in QuickBooks, we highly recommend you connect with Dancing Numbers team of professionals like us.

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