The Importance of Reconciliation
In most agencies, like any successful business, money is moving quickly from pocket to pocket to pay for policy premiums, commissions, claims, and to keep the lights on – just to name a few. If you trust that all those dollars are moving as expected and in a timely fashion, you may want to take a moment and verify your data. We’ve heard multiple stories from agencies who thought the carrier was sweeping their accounts for the right policies and premiums only the amount ended up being a decimal point off or a policy was not included in the sweep. These insurance agencies usually wish they were performing reconciliation. To help our agents with this important task, ITC’s agency management system InsurancePro provides reconciliation in a few different ways: payments with carrier reports, commissions, and payments with checks.
Reconciling Payments with Carrier Reports
InsurancePro provides agencies a way to verify that the payments they receive are being passed onto the carrier properly by way of what we call payments processing. This compares the list of payments received to the line items in the carrier’s report that describe the amount due to the carrier on behalf of the agency’s customers. When agencies perform this kind of reconciliation in InsurancePro, we strongly recommend that they do not create checks when receiving a payment, which has been the traditional method before this feature was designed. Why? The existence of a check associated with a payment is the indication to InsurancePro that the payment has been reconciled with the carrier’s report.
Commissions are reconciled in InsurancePro on the Agency and Agent Commissions screens. To reconcile an agency commission, fill in the amount paid for each commission you wish to reconcile, select the checkbox in the left hand column, and click the Reconcile button at the top. Reconciling an agent commission is simply marking the commission as paid.
Reconciling Payments with Checks
This feature is designed to ensure the payment passed on to the carrier matches the payment received by the agency. To perform this reconciliation, on the top menu, click Payments, then Reconcile Payments. Next, select the bank account you wish to reconcile and begin selecting matched deposits with withdrawals. Once you have made all of your matches, click the Reconcile button at the bottom of the screen.
Reconciliations are one way InsurancePro helps agencies be efficient and successful as these agencies are able to verify their money is moving to where it is supposed to be in the correct amounts.