The insurance industry has specialized accounting for both underwriters and agencies. For agencies, the accounting depends on several factors, depending on the two major factors:
Method of Billing/ Payment
The agency has the
authority to bind
policies on behalf
of an underwriter
Methods of Payment/Billing
Upon Receipt of Insurance Binder
The agency bills the insured for the premium, taxes, and fees, and remits the premium taxes and fees less the commission to the carrier.
Payment of Premium Bill
The underwriter bills the insured directly, and the agency has a receivable for the commission from the carrier.
Collection of Premium Bill
Typically, carriers will provide formatted statements of payments made to the agency on direct bills. This can be uploaded for the automatic creation of cash receipts from the Carrier, along with the automatic application of that cash receipts to the agency billing of the carrier. This provides an inherent reconciliation of direct pay policy commission receipts with what is due under the policy
Ayodia Insurance Work
Implementation and customization of Accounting Seed to provide a comprehensive financial automation solution for numerous agencies, including.
Automatic accounting entries for policies that are either agency bill or direct bill, with all billings, payables, revenue, and commission expense billed in the correct amounts to the correct parties
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