Scenario 1: Advance Pay out by Internal Broker
Adding an Internal Broker Advance in Commander Back Office
- Enter Advance by going to Transaction/Commission Tab/Highlight Agent in table and click on Adv. button on left (Advances). If the Agent is on both ends of the transaction, you must create a separate advance for each end of the transaction.
- The following Advance window will appear.
- Select New – to add the advance information
- The Agent Ref ID, Transaction No. Agent Comm and Agent Tax default with the Transaction’s details
- Enter the Reference No. field at this time, if required
- Select the Advance Date
- Select Advance Company Type (B: Broker) and the Company Name (your own company name) as the Advance Company
- Enter the Advance Amount Paid
- Finance Charge should be used for 3rd Party Advance processing fees or leave this field blank
- The Agent Advance Handling Fee field may be used in the event the broker (you) charges a fee to your Agents. If applicable, complete Agent Advance Handling Fee and applicable Tax fields
- The To Advance Co field will populate with the total of all amounts as entered above.
- Select the Advance letter and generate if applicable
- If you want a check/cheque to be created and integrated to QuickBooks® at the time of creating the advance, you can make the following selections and a check/cheque will be issued from the General/Operating bank account and be payable to the agent for the amount entered by user.
To do this, make the following selections accordingly:
- No Flag Checked just Save – no advance check/cheque will be generated
- Post to Accounting Flag Checked and Save – will post only when user goes to Accounting / Update Agent Advances & Reverse
- Post Immediately Flag Checked And Save – will post immediately to QuickBooks®
- When advance is saved using either post function, it automatically posts to either Accounting or QuickBooks®. At that time, the advance cannot then be edited or modified. If entered incorrectly, user can reverse entry by clicking the REVERSE button, make the necessary changes to the advance, then go to Accounting / Update Agent Advances & Reverse.
- The Reverse logic will follow the current logic and the advance will be enabled for editing once again.
Above logic applies to advances entered either in Real Estate/Trust/Adv/Exp/Agent Advance or using the Advance button on the Transaction/Comm screen.
Finance Charges and Agent Advance Handling Fees do not apply to Advance Check/Cheque to Agent.
Advances cannot be reversed on closed transaction unless transaction is reversed first.
When Advance Check/cheques are created in QuickBooks® it will post as follows:
- General/Operating Account is credited
- Transaction Clearing Account is debited
All affected reports and letters will display values accordingly.
IN THE EVENT THE ADVANCE RECEIVED IS LESS THAN THE ORIGINAL ADVANCE PAID, IT IS UP TO THE USER TO REASSIGN THE ADVANCE BALANCE OWING TO ANOTHER OPEN TRANSACTION – USING THE NEW ADVANCE AMOUNT PAID FIELD – BUT NOT POSTING TO EITHER ACCOUNTING OR QUICKBOOKS®.
13) Once an advance has been attached to a transaction, we will display the following icon so that the transaction is easily identifiable via the QuickSearch screen.
- Viewing Outstanding Advances in Commander Back OfficeTo view existing advances in Commander Back Office, click on the Accounting Menu and select Search Agent Advance.
You will see the following screen:
- You have the option of searching for the advance either by Agent or Transaction (at this point).
- Select the Lookup button which takes you to the Agent profile screen; select the Agent. Click OK.
- Click on the search button to view all advances connected to the Agent.
- You can edit an advance here by selecting the Edit button; save when modifications have been made.
Scenario 2: Advance Pay back to 3rd Party
The advance is deducted from the Agent at the time of their next closing, and a check/cheque is issued to the advance company to clear the broker liability.
If there is more than one advance paid from a 3rd party advance company, this step will be repeated, until all advances are repaid.
Repayment of a 3rd Party Broker Advance in QuickBooks®
Pay Advance Fee to 3rd Party Out of Commission Trust Account/ Write Check/Checks/Cheque/Cheques to Advance Company
- A Check/cheque will be issued to the advance company from Commission Trust
- “Third Party Advance Payable” Current Liability Account will be debited with the cheque amount Commission Trust Account will be credited the full amount.
General Ledger Accounts Affected when using Advances
Default Advance Bank Account
- This is the bank account where Agent’s advance check/cheque is issued from
- Many companies use the Operating/General Account as the Default Advance Bank Account.
Transaction Clearing Account
- This account is used to track the pay out and pay back of the Agent advance (The amount posted to this account will be the Amount Received and the Finance Charge as entered on the Advance screen in Commander Back Office) When the Agent is paid an advance, the amount posts to this account as a debit.
- When the Agent advance is paid, it posts to this account as a credit.
Agent Advance Handling Fee Account
- This account is used to track the fee that a broker may charge an Agent in the event the broker advances commission. In Commander Back Office this amount represents the value entered in the Agent Advance Handling Fee box of the advance screen
- The money is deducted from the Agent’s commission portion at the closing of the transaction.
Third Party Advance Payable
- This account is used to track the advances that Agents get from 3rd Party.
- When Agent receives advances from 3rd Party, this account will be credited.
- When an advance is issued by a 3rd party, it is paid by Agent’s commission, this account will be debited.
Editing an Advance
You should only Edit an advance if you need to make corrections to one that has already been entered. For example, the finance charge or Agent advance handling fees have changed. If you want to create another advance in addition to the one that has already been processed, then you should follow the directions noted above in Creating Agent Advances.
Voiding an Advance
Click on Edit from the Commission tab of the particular transaction. Highlight the Agent whom you processed the advance and click the Adv(ance) button.
Click Edit and zero out (0.00) all numbered fields, then Save. In some cases you may need to close Commander Back Office and reopen for the new values to take effect. If an internal broker advance check/cheque was issued, it can be voided in QuickBooks® by going to Accounting / Update Agent Advances & Reverse.
If an advance was already assigned to an Agent, you must reassign it to another transaction and recalculate the finance and/or handling fees accordingly.