When it comes to accounting, many agency owners want to throw up their hands. From accounting software to best practices for managing your book of business, it seems the world of insurance accounting is simultaneously critical and complex.
It doesn’t have to be this way. We sat down with two authorities in the insurance accounting field, asking everything from “What’s the best accounting software for insurance agents?” to “How can owners avoid accounting issues?”
When it comes to accounting, what are some common questions you hear from clients?
Chris: At Donovan, Sullivan, and Ryan, we discovered the independent agency market needs someone who understands their nuances and speaks their language. Over the past 25 years, we’ve focused on specializing in serving independent agencies and found there are four main problem areas for most agencies. What we hear about most are issues with management and accounting system efficiency, how to streamline administrative tasks, help with staffing, and questions around agency perpetuation. We’re usually dealing directly with the owner in these areas who, especially in smaller agencies, is acting as the accountant as well.
Bryce: We’ve worked with agencies ranging in size, specialization, and experience from all across the country. The most common questions I hear are around the Client Ledger. Often, clients are looking for advanced reporting or help with reconciling accounts. For commercial agencies, we get questions around Direct Bill Commission download and how it synchs with the Partner Platform system.
What issues do your clients face and how do they manage them?
Bryce: Usually, calls we get are about fixing a mistake and how to correct it in the Partner Platform system. We also hear from agencies who need to find a transaction to correct a book imbalance. The third most common is ensuring they have their systems set to correctly pay commissions automatically. It’s minor things as they get used to the system, and then they’re off and running.
Chris: We also get calls about how to fix an issue or how to use a system. We tackle this by providing training to clients on their specific systems and offer monthly reconciliations to avoid errors that could cause long-term issues.
We also work with agencies to handle administrative tasks in a low-cost manner. Most of the issues are around bill processing. Agencies use direct bill whenever they can, but it’s not always an option. We provide three different levels of monthly accounting support to free up time for owners, allowing them to focus on growing their business without having to hire an internal accountant.
Let’s talk accounting software for insurance agents. What do you see clients using, and why do they select those tools?
Bryce: There’s not a lot of accounting tools out there. They either use QuickBooks or Peachtree, or an integrated accounting system. Some may go for a third-party payroll company as well. Most of our clients go for names they know, or a tool they know is made for accounting or payroll specifically. What they may not know is that an integrated system can do all those things without needing to buy something new.
Chris: In many cases, we see an agency using a management software with an accounting element, but they’re not using that accounting element. When asked why we hear, “it just didn’t make sense,” “it’s confusing,” “it’s not user-friendly” and so on. It seems owners learn the management system side and by the time they get to the accounting, they’re burnt out on learning. So, they turn to QuickBooks as something more intuitive with a faster learning curve. It’s a shame because the integrated accounting systems can save them a lot of time, money, and energy.
What are the pros of integrated accounting versus an external system like QuickBooks?
Chris: Though the ease of QuickBooks is appealing, we always advise clients to use the integrated accounting systems. With integrated accounting, agencies can take advantage of the synergies of the software. If they go over to QuickBooks, there’s duplication of efforts and extra work. They’re underutilizing the agency software (that they’re paying for). We cringe when see agencies investing time and money into these robust systems and then putting everything into QuickBooks. It’s more effort, and it doesn’t need to be like that.
Bryce: Though we don’t recommend an agency use a general accounting system, we see clients who use them to manage their business. Reporting is a huge deal. The amount of data that flows from a management system to QuickBooks simply isn’t sufficient for an in-depth analysis of the agency’s financials.
Agencies tend to have more than one bank account, and often several different accounts need to be managed. It’s messy to manage multiple accounts in QuickBooks and usually requires multiple subscriptions. Partner Platform’s accounting system is designed to handle multiple accounts, and everything is contained in one system. General accounting transactions are managed much better when in a single system. Anytime a user must jump from one system to another, it creates more steps and a separate user experience.
How has integrated accounting in the Partner Platform benefitted your clients?
Bryce: Accuracy and efficiency are the two significant benefits we hear from our clients. Commissions management is one piece we hear about most often. Our direct bill commission allows agencies to set it up once and never have to worry if commissions are running again. And, our system allows for import of direct bill commissions, even if the carriers don’t offer direct bill commission download. That alone can save an agency dozens of hours a month.
Chris: We found Partner Platform’s accounting is easier to understand for most of our clients. It’s user-friendly and integrates really well. In many cases, clients who convert to Partner Platform abandon QuickBooks for the Partner Platform accounting system because it makes more sense to them. That’s a huge help because it streamlines processes, reduces errors, and makes the potential headache of accounting that much easier for our clients. That translates into smoother conversations down the line, especially when it comes time to evaluate next steps in selling or passing on an agency.
What’s one final piece of advice you’d give to agency owners?
Chris: Investment in an management system with integrated accounting is an essential part of a well-managed agency, and a well-managed agency acts as an annuity for its owners. Agency owners need to exploit the technology available to them, utilizing it to automate as many agency operations as possible so they can focus on growing their business.
An owner should focus on making management decisions to get the highest possible sale price rather than getting dragged down in daily administrative details. Leveraging technology to its fullest capabilities is critical. All agencies should take advantage of software that integrates, streamlines, and has cross-referencing capabilities as much as possible.
Bryce: Always stay involved in your bookkeeping process and understand your numbers. Financial management is key to your business’ success. Too often, we hear horror stories of a bookkeeper mishandling accounts, leaving the agency and owner to clean up a mess they don’t understand. It’s too dangerous not to know what’s going on in your agency, and an integrated system ensures you have a handle on all the data.
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Want to know more? Hear directly from Partner Platform clients on their experiences with integrated accounting on our Client Stories page and get in touch with us to find out how to sync your systems today.
The 2019 Partner Community National Conference held May 9th-10th in Columbus, Ohio was a memorable event on many levels, including celebrating 10 years since the current leadership team acquired SIS and launched the Partner XE management system, precursor to the Partner Platform.
Collaboration and Innovation from Industry Leaders and Experts
I have many wonderful memories reflecting on the journey of the last decade, including the progress made to the Partner XE agency management system and the growth of the Partner Community. During our National User Conference, we celebrated all these accomplishments, but the main focus of the event was on continual improvement around serving our Partner clients today and into the future.
At the conference, attendees heard from industry influencers like Steve Anderson, Mary Eisenhart Belka of Eisenhart Consulting, Brad Ruben of Archway Computing, and Carey Wallace of Ohio Insurance Agents (OIA). We also held several panel discussions on perpetuation, group sessions on targeted topics like accounting and client engagement, as well as a unique presentation on leadership by John Rue from Built to Lead.
Attendees hear a welcome address from SIS CEO, Alex Deak
Inspiration and Connection in the New Partner Platform
And if that wasn’t enough, over 30 learning sessions were standing room only, focused on helping Partner clients learn and grow. While the learning was going on, we introduced the new Partner Platform: a response to our Partner clients looking for a system that does great agency management as well as integrates more effective client retention and new business capabilities.
The fully integrated Partner Platform system includes great policy and financial management in Partner XE, simple and integrated sales and marketing capabilities in Partner XL, and innovative client self-service options in Partner Connect. The combination of all three delivers a seamless experience that stretches from prospect to renewal and covers everything in between.
Thank you to all Partner clients and speakers who made the trip from all over the country to celebrate, collaborate, and innovate with us. We continue to receive an overwhelming volume of positive feedback, with attendees saying they look forward to returning next year, with more colleagues in toe.
We look forward to continuing the momentum in the Partner Community with more regional learning events, connecting, collaborating, and innovating the Partner Platform and growing the Partner Community for years to come.
Find out more about our community and the Partner Platform at sisparterplatform.com.
Agency succession is coming. You have two choices: make it happen or let it happen to you.
As an independent agency owner, you know the first option is the best. Taking control of your succession planning means you’re ready when the time comes. To prepare, you need to do things like choose a successor, determine your agency’s worth and have the right insurance agency support procedures in place. In short, you need to think about three areas: People, Profit, and Process.
Being a paper-reduced or paperless agency means much more than moving billing online. It means transforming your procedures and processes, switching from printing and filing to synching and storing. Your customers may not know what you’ve done behind the scenes, but they’ll feel the impact. Paperless agencies can serve customers up to 50% faster, making them 100% more satisfied.
Automation plays a significant role in many industries, and insurance is no exception. The rapid innovations of insurtech have thrust data and automation into the forefront of ways to improve and enhance agency operations.
One of the most prominent data automation uses is in the underwriting process. Due to digitized automation processes, agencies are seeing loss ratios decrease and overall premiums increase. According to Willis Towers Watson, over 60% of agencies surveyed say the predictive analytics of automated underwriting have reduced issues and brought down expenses.
Underwriting automation has great value, but the wealth of data and required processing power can be daunting for the average agency. Yet, if your agency can put in place the right processes and people to gain and manage underwriting data, you can see a big change.
A lot has changed over the past few years due to the unexpected disruptions of the COVID-19 pandemic. All industries felt the impact, and the insurance industry is no exception. One of the most notable disruptions is the speed at which changes took place, especially around customer expectations and marketing.
What Your Agency Needs to Know About Insurance Marketing
Changes in insurance agency marketing that were projected to solidify in 5 to 10 years ended up evolving rapidly in just two. Chances are you’ve already made some of these adjustments to keep up with immediate demand, but there are other more “behind the scenes” adjustments agencies are making that you should note
The COVID-19 outbreak in 2020 left a lasting impact on the world, including how we do business. Quarantine and frequent lockdowns forced us to stay home, and the changes in customer expectations, work environments, and operations remain today.
Insurance agencies that weathered these changes have a few things in common. For one, they had the right insurance software to make the quick transition to remote work and service. Secondly, they have an enduring attitude of being open to change and a readiness to adapt. While we cannot predict what will disrupt the market next, we can use these markers to prepare with the right mindset, tools, and systems for the next unexpected interruption.