Streamlined Invoicing Process for an Insurance Brokerage Firm

  • Posted by FinancialZone
  • 01 December 2010
  • Projects

A growing wholesale insurance brokerage firm in Georgia, specializing in medical malpractice coverage, asked us to help them streamline the way they account for each policy sold.   Since each deal has several financial components affecting revenue, accounts receivable, and accounts payable, it can be difficult to get accurate reporting and to keep their trust accounts in balance.

PROBLEM
Commissions on each deal are calculated and recorded manually after a premium payment is received from a client.  Then a payable is recorded separately after a manual calculation determines how much is owed to the insurance underwriter and various state agencies for fees and taxes.  This scenario has thrown the books out of balance, and has prevented the company from generating financial reports that display a clear picture of operating results.  It is also extremely inefficient.

SOLUTION
In QuickBooks Pro, we configured the company's Sales Items and Invoice Template so that all of the financial effects of a particular deal are contained in one spot.  This drastically streamlined the process so that:

  • Commission Revenue is now recorded when it is earned (when the policy is executed), instead of when the premium is collected.
  • A receivable is recorded when the policy is executed, so the firm can track how much each client owes, and when the premiums are due.
  • Various payables are recorded when the policy is executed so the firm can track how much they owe to the insurance underwriter and the various state/local agencies and when they are due.
  • The company can hide many of the invoice details from their client, but still be able to provide the client with the information they need.
  • The trust accounts are always in balance.
  • Overall, management has a much better sense of how the business is doing without having to keep a bunch of numbers in their head.  Because each deal is input in a consistent manner, they can now rely on their reporting.  This has also drastically reduced the amount of time they spend on their accounting.

If you or someone you know needs help in streamlining accounting processes, please contact us.

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