Insurance Bookkeeping: Best Practices for Agencies Best CPA & Accounting Services

One small reporting error in a sea of bookkeeping tasks can throw off your whole operation. Commissions get misreported, trust with producers takes a hit, and your financials go from clean to chaotic—fast. QuickBooks lets you customise invoices with logos, payment terms, and more, accounting for insurance agencies helping you maintain a professional image while streamlining billing. Even if your agency is located in a state where you may legally commingle accounts, it is not a good idea. You should look for accounting software that is easy to use and intuitive, even for non-accountants. The user interface should be clean, organized, and user-friendly to ensure that you can navigate and use the software without difficulty.

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When I read these reports, especially the Accountants’ Reviews, some are quite insightful and some are worthless. Given the expense and lack of insight of the worthless ones, the agency just wastes their money. The really good CPAs will prescribe the right report for your situation and the quality of their reports will be worth the money spent. Implementation efforts for IFRS 17 will vary depending on the systems, methods and data storage capabilities currently used to measure and track insurance contracts, account for, report and disclose related information. Outsourcing your agency’s bookkeeping tasks frees up valuable time that can be redirected into growing the agency.

• Choosing the right software involves assessing your agency’s needs, comparing options, and utilizing free trials and feedback.
• This ensures accurate tracking of earnings, streamlines financial reporting and efficiently handles complex accounting tasks.
• Commissions fluctuate, claims take months—sometimes years—to settle, and tax deadlines creep up before you’ve had a chance to organize your accounts.
• Give your clients a superior payment experience with Applied Pay, then avoid manually processing reversals and voided transactions twice – in the Applied Pay portal and in Agency Accounting.
• However, this isn’t just a New York issue—regulatory bodies in all states enforce strict rules on keeping carrier funds and PTAs separate.

Accurate Records

• August 1, 2017, the IASB issued its comprehensive new accounting model for insurance contracts, IFRS 171 – replacing its 2004 ‘temporary’ standard (IFRS 4).
• Insurance code mandates insurance brokers to receive premiums in a “fiduciary” capacity and assume full responsibility for their financial solvency.
• Automation features within these tools simplify operations, allowing agencies to focus more on strategic growth rather than time-consuming manual tasks.
• She has also designed and led countless classes and training sessions focused on accounting functions within AMS360.
• Many agencies invest retained earnings in low-risk assets such as bonds and money markets.

Once the bill is paid, the company then sends a commission payment to the agency that sold HOA Accounting the policy. No matter what your accountant/CPA says, premiums received are not income, and premiums paid are not expenses. Accounting practices for independent insurance agencies differ greatly from those traditionally used by other small businesses. However, those changes are likely to differ significantly from the requirements of IFRS 17. Unfortunately for dual reporters, there are no convergence plans between ASC 944 and IFRS 17.

Bookkeeping and Accounting for Insurance Agencies 2025 Edition

Setting different levels of access and permissions protects sensitive financial data, enhancing security and collaboration. This flexibility allows insurance agencies to operate more efficiently, with unlimited free sub-users benefiting from the platform’s collaborative capabilities. FreshBooks integrates with 100+ apps, providing insurance agencies the ability to customize their FreshBooks experience and take control of their accounting processes. Working on products/services, client requirements, planning, team build-up, organization workflow, payroll, human resource management, etc. are some o…

• She has held various positions with Carriers including System Interaction Specialist, Personal Lines Underwriter, Commercial Lines Underwriter.
• It offers features like invoicing, payment processing, expense tracking, and financial reporting.
• Monitoring the policy financial status and reporting it is an integral part of the premium solvency management.
• To further optimize bookkeeping practices, insurance agencies should seek accounting software that seamlessly integrates with other systems used within the organization, such as customer relationship management (CRM) software.
• All agencies have the opportunity to review their reports with a staff accountant.
• The new measurement model aims to provide relevant information about the future cash flows.

No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. Fixed-fee service contracts, such as roadside assistance programs and certain financial guarantee contracts, may meet the definition of an insurance contract. However, when certain specified conditions in IFRS 17 are met, a company may exclude such contracts from the scope of IFRS 17. It then accounts for fixed-fee service Online Accounting contracts like other service contracts with customers and financial guarantee contracts under the financial instruments standards.

Challenges of Insurance Agency Accounting

You should look for accounting software that offers automation features to save time and improve accuracy. The right software can help you manage your finances more efficiently, automate manual processes, and provide real-time insights to make informed decisions. In this article, we will look at 15 factors to consider when choosing the best accounting software for your insurance agency. It offers features like invoicing, payment processing, expense tracking, and financial reporting, as well as inventory management, payroll processing, and project management. Xledger also integrates with other third-party applications like Salesforce and Microsoft Dynamics.