Insurance agencies know that commission calculations can be a nightmare. Especially if a broker discovers they were done incorrectly.
Employee benefit brokers work with multiple insurance carriers and each of them pays commissions. The agency takes a cut and the producer, or broker, gets a cut. Each of the commission allocations are different based on the policy sold, such as the type, length, tier and terms. For example, perhaps for the first year a broker gets a certain percentage but every year after gets a smaller percentage. Suffice to say, there are many moving parts.
Every month the agency gets a statement, using an Excel spreadsheet, from each carrier that lists their policies sold and the corresponding commission payments. The commissions paid need to be matched up with the broker who sold the policy, for every single carrier.
To further complicate this process, Blue Cross may have a different commission statement than Tufts, for example; there is no consistent format. So this process truly can be an administrative nightmare for whoever is processing the monthly commission statements.
The Old Solution
The most common way of tracking the complicated commission calculations is in an immense Excel spreadsheet.
However, doing this level of data entry, in Excel or even in an ERP system, brings with it the very real risk of inaccuracies due to human error. Not only incorrect numbers but entire formulas can be corrupted; the information is trapped in a single spreadsheet – a silo of disconnected data that cannot easily be used for forecasting or reporting; and it just takes a very, very long time.
The New Reality
To solve this problem we built a commission tracking module that is part of the
The Future Value
A complex process that would normally take a week is slimmed down to a matter of hours. Brokers get their commissions faster and the finance person who used to do these calculations breathes a sigh of relief.
Not only does BenefitsBridge solve an administrative problem it also provides the agency with forward-looking forecasts.
Since each policy has a term, the commission number is spread out over 12 months. Every time an agency runs their commission statement it reconciles based on what is expected and what is actual. This allows the agency to report and forecast on what money will be coming in through the end of the year.
This can help the agency to make strategic decisions such as hiring. Brokers have visibility into how much bonus they are going to take home; everyone has a better idea of where they stand and can trust that the numbers are accurate.
Commission calculations no longer need to be a nightmare. This is just one of the reasons Benefit Brokers love BenefitsBridge from AbleBridge.
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Contact us to discuss your commission calculations. [email protected] or 877-600-2253.
By AbleBridge, Microsoft Dynamics Gold CRM Partner,