Overview

The platform manages invoicing by :

• Generating invoices to collect policy premium
• Automating invoice reconciliation.
• Providing invoice payment plans (Monthly or Quarterly) and supporting down payments
• Receiving and paying ALAE bills directly from AI Insurance.

Prerequisite

Set up Cash Management within your application to manage invoices and billings.

Invoicing

You can create, send, and pay invoices out of the platform.

Create an Invoice

When Cash Management is all set up, a new Billing section will be added whenever you Create a PoIicy.

The Billing section is divided into two parts, as shown in the image below: Bill and Payment.

Bill section

This section contains information on the total amount, including premiums, taxes, and fees, an insured is expected to pay, as stated in the policy.

You can also add additional fees in this section; these additions will automatically affect the policy’s grand total and appear directly on the generated invoice.

Payment

This section allows you to indicate the insured’s payment periods and billing email address. We offer three payment schedule options.

• Annually: This method sends the recipient an invoice for the due amount.

• Quarterly Payments: In this payment method, we’ll create four equal payments and send them to the recipient. We’ve also added the option to increase the total amount due by a percentage of your choice if you wish to add an additional charge for this option.

The initial invoice will be generated up to one quarter before the policy start date, and then future invoices will continue to be issued a quarter in advance.

• Monthly Payments: We will generate separate monthly payments, and the recipient will receive links to the new invoice on the same day of the month that the policy starts (e.g., If the policy start date is 1/4/2024, then invoices will be sent each month on the 4th day).

Each invoice is sent a month in advance and is due on the same day of the next month. Similar to the Quarterly payment period option, we allow for an adjustment in the total amount due.

We also provide the functionality to require down payments.

• Do not send bill: We don’t require that you bill through AI Insurance. Select this option to avoid creating an invoice and sending it to the recipient.

Note: When using this option, please note that, in addition to an invoice not being generated, we will not automatically track this invoice in the Financial section of our app.

After creating the invoice, we’ll automatically send it to the billing email address provided. This can be the email of the insured, their broker, an AP department, a premium finance company, or others. You can even send the invoice to yourself if you still want to track it and mark it as paid manually.

Invoices are only generated and sent once the created policy has been bound/confirmed or a quote has been accepted.

View Invoices

After entering your billing information, create a policy to receive the invoice link in the recipient’s email. Here’s an example invoice below:

A link to the invoice and payment details will also be added to the Transactions section on the Financials page. Click the Financials tab at the sidebar to open the Financials page as shown below:

Clicking on the invoice takes you to the digital version, which you can download as a PDF or share with another third party via the URL.

Premium Changes

It’s common for endorsements to impact premiums throughout a policy’s active lifecycle. These endorsements may mean adding insureds (increasing the premium), terminating insureds (decreasing the premium), or changing the terms of their coverage. We handle this increase or decrease automatically for our users, depending on the payment period associated with the policy:

Paid in Full

We handle premium changes for a policy with a payment period of Pay in full as follows:

• Premium Increase: We will generate a new invoice to request the additional premium payment required.
• Premium Decrease: We will issue a refund if the entire premium has already been paid. Otherwise, we’ll void the outstanding invoice and re-issue a new one for the correct amount.

Quarterly or Monthly

We handle premium changes for a policy with a payment period of Quarterly or Monthly as follows:

• Premium Increase: The additional premium amount will be amortized over all remaining invoices to be sent.
• Premium Decrease: The decrease in premium will be amortized over all remaining invoices to be sent.

Payment Reconciliation

The platform automatically handles payment reconciliation for invoices, including scenarios where payments are over or under the expected amount.

Auto-Reconciliation Rules

Our auto-reconciliation feature applies the following rules:

• 30-Day Window: Auto-reconciliation only applies to invoices that are less than 30 days overdue
• Due Date Alignment: Due dates align with the invoice date (e.g., if an invoice is generated on January 15th, it’s due on February 15th)
• Payment Matching: The system automatically matches payments to the corresponding invoices within the reconciliation window

Handling Over/Underpaid Funds

When payments don’t match the exact invoice amount, the platform handles the difference as follows:

Overpaid Amounts

• Credit Application: Overpaid amounts are automatically applied as credits to the insured’s account
• Future Invoice Deduction: Credits are automatically deducted from the next invoice due
• Credit Balance: You can view the current credit balance in the Transactions section of the Financials page

Underpaid Amounts

• Partial Payment Recording: The system records the partial payment and maintains the outstanding balance
• Reminder Notifications: Automated reminders are sent for the remaining balance
• Late Fee Application: Late fees may be applied if the invoice exceeds the 30-day overdue period

Manual Reconciliation

For invoices that exceed the 30-day auto-reconciliation window:

• Manual intervention may be required to properly allocate payments
• You can manually adjust payment allocations in the Transactions section
• Contact support if you need assistance with complex reconciliation scenarios

Regular monitoring of the Transactions section in Financials is recommended to ensure all payments are properly reconciled and to address any discrepancies promptly.