What Is Commission Reconciliation?
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Commission reconciliation is checking every line of a carrier's commission statement against the sales your agency wrote.
What it is
Each statement lists the policies a carrier is paying you on. Reconciling it answers four questions, line by line:
- Is every policy you wrote on the statement?
- Is each commission rate the one in your contract?
- Is each commission amount right?
- Is each sale credited to the right producer?
A carrier that pays you short does not tell you so. Nobody finds a missing payment unless someone looks for it.
The errors it catches
- A missing policy: you wrote it, and the carrier has not paid on it.
- A wrong rate: your contract says one rate, and the statement applies another. Watch for it after your volume moves you to a new rate.
- The wrong producer: the commission is right, but credited to the wrong person, so your own producer pay goes wrong.
- A late policy: it shows up a month or two after you wrote it. Mark it and check the next statement before you call it missing.
A worked example
Example. Your contract pays 12% on new auto. A $1,200 policy appears on the statement at 10%: $120 instead of $144. That one line is $24 short. The same mistake on 50 policies a month is $1,200 a month.
How to do it
- Download each carrier's statement as soon as it arrives.
- Pull your own sales for the same period.
- Match them line by line on policy number, customer, producer, premium and commission.
- Mark each line that is missing, on one side only, or for a different amount.
- Send each error through the carrier's own dispute process.
- Check the next statement to confirm each fix arrived.
How Producify works it out
Producify does not read carrier statements.
Producify works out what each producer has earned from your sales and your commission plans. Checking the carrier's payment against that is still your step, or a dedicated reconciliation tool's.
To check a statement against your sales, Export on the Sales Log downloads a spreadsheet of every sale that matches your filters and search. See Download sales as a spreadsheet.
Frequently Asked Questions
How often should I reconcile?
Every month, as each statement arrives. Errors are easier to prove while the sale is recent, and your carrier contract sets how long you have to dispute one.
Is reconciliation the same as a commission audit?
Close. Reconciliation is the monthly check. An audit usually means a deeper look back over a year or more.
Keep the sales log you check against
Producify holds the sales log you check a statement against: Export downloads a spreadsheet of every sale that matches your filters and search.
Producify is commission tracking software for independent and captive insurance agencies.