15 Best Accounting Software for Insurance Agency

Business operating funds are managed to show business owners and shareholders if the agency is both profitable and financially solvent. FreshBooks streamlines expense tracking for agency costs by offering features like receipt scanning, expense categorization, and automated bank reconciliation. This simplifies expense management, reduces manual errors, and ensures accurate financial reporting. AgencyBloc offers full-featured cloud accounting software for property and casualty insurance agents and brokers. Proper Law Firm Accounts Receivable Management financial management and reporting are important because you are responsible for ensuring that you can pay out policyholders at virtually any point in time.

• To prevent this type of error from occurring, both the accountant and the business owner should compare the monthly deposits to the monthly commission statements received by the agency.
• The systems are designed to handle complex accounting processes specific to the insurance industry and comply with strict laws and regulations.
• To generate a report of how much of the policy transacted premium was invoiced or paid and how much is outstanding, insurance brokers generally maintain a spreadsheet outside the GL accounting system.
• Proper bookkeeping plays a pivotal role in ensuring that agencies adhere to these legal obligations.

Time Savings

Unlike other sales transactions, a P/C insurance transaction places stringent obligations on the seller. Insurance code mandates insurance brokers to receive premiums in a “fiduciary” capacity and assume full responsibility for their financial solvency. Acting as a “custodian” of premium funds is a responsibility an insurance broker must undertake in addition to his/her primary duty accounting for insurance agencies of maximizing the agency output and improving its profit performance. Good trust accounting consists of holding these monies in a trust account separate from all other monies. It also consists of having specific payable and receivable accounts, separate from operating payables and receivables.

Separate Business and Personal Finances: A Prerequisite for Financial Clarity

It offers features like invoicing, payment processing, expense tracking, and financial reporting, as well as inventory management and project management. Zoho Books also integrates with other third-party applications like PayPal, Stripe, and Square. In the digital age, technology has reshaped the landscape of business operations, and bookkeeping is no exception. For insurance agencies seeking to optimize their financial processes, investing in reliable accounting software is a strategic move that yields numerous benefits. Tailored specifically to the needs of insurance professionals, these advanced tools offer automation, generate essential financial reports, and provide real-time insights into the agency’s financial performance. For independent insurance agents and agency owners, business and personal finances often mix up easily.

Tax compliance essentials for insurance agents

Then, our experts curated a large selection of Microsoft Office, leadership, and sales classes to include that are ideal for agency personnel. The Academy can be branded and customized for subscription clients, including the addition of the agency’s content, custom learning plans, and the ability for agency supervisors to assign training and track progress. Training and development with Lighthouse Academy is streamlined, focused, and geared specifically for independent agency personnel. A chart of accounts (COA) is the foundation of organized bookkeeping for insurance agents, categorizing financial transactions in a way that reflects how agencies earn revenue, manage expenses, and track liabilities. No matter what your accountant/CPA says, premiums received are not income, and premiums paid are not expenses.

A good practice is to create a trust account specifically named “trust” account in order to have more banking protection if a bank was to go insolvent. This sometimes leads to bad advice, like spending the money that you are, by law, holding on a fiduciary basis. Gain complete insights into your agency’s financial health with EZLynx Agency Accounting. Non-Integrated accounting systems are stand-alone products that work tightly with your management system. There is a lot of conflicting information available on the pros and cons of the two methodologies. While many salespeople and software-specific consultants have strong opinions about integrated vs. non-integrated, they are usually misinformed.

The right accounting software support shaves time off repeatable tasks and better connects your business operations. Plan for all scenarios with the right cash flow management and storage of funds. No one wants a policy to be canceled early, but planning ahead and avoiding any shortage of funds will set your business apart. Vertafore’s solutions help streamline critical agency workflows to improve productivity and organization across customer acquisition, policy management, and financial processes.

Insurance agencies’ accounting systems must also integrate with existing insurance agency software to process complex processes like premium recognition and claims management. The integration ensures accurate data filing and syncing so businesses can have a cohesive system. Sage Intacct’s reporting dashboards allow broad and detailed financial reports using real-time data. Agencies can examine specific locations, compare performances, or roll entire company data into one consolidated view to evaluate overall financial health. Metrics like goal tracking, net income, revenues, and expenses are available to Accounting Periods and Methods help management make better-informed decisions.