Lack of Identifying Revenue Source. Treating all income as commissions will not allow proper analysis and may potentially create false impressions of the actual revenue. Use accrual accounting to distinguish between agency-billed and direct-billed commissions. Separately identify commissions, agency fees, contingent, and bonus income.
Skipping Reconciliations. Delayed bank or carrier reconciliations can result in missed commissions and inaccurate cash reporting.
Mixing Trust and Operating Funds. Commingling funds carries the risk of misusing client funds, followed by regulatory fines in many states. Maintain separate accounts and reconcile monthly.
Weak Internal Controls. If accounting is handled internally, failing to segregate financial duties increases the risk of fraud. Assign distinct roles to several employees for data entry and approvals.
Ignoring Cash Flow. Variable commission cycles require proactive monitoring and budgeting to avoid liquidity issues.
Topics Agencies
Was this article valuable?
Here are more articles you may enjoy.
State Insurance Legislators ‘Greatly Disturbed’ by Trump AI Regulation Order 
Aon Adds to List of Brokers Suing Howden US for Alleged Poaching, Theft 
Court Awards $32 Million Over Premature Baby’s Death at Yale Hospital 
North Carolina Sting Operation Alleges Roofer Damaged Shingles to File Claim From This Issue
