Blog · Finance metrics and formulas · Insurance
Explain differences between booked commission and cash received. Reconcile opening balances, new items, adjustments and receipts.
A slow receipt month can look like a fall in production when the agency report uses cash as a proxy for commission earned. A busy booking month can also conceal collection delays. Reviewing both views gives finance a clearer discussion of timing without redefining the accounting policy.
One row represents: one booked commission item and its allocated receipt or adjustment records.
Useful fields: Commission item ID, policy term, carrier, booked date, booked amount, expected settlement date, allocated receipt date and amount, adjustments and outstanding balance.
Build the outstanding balance from booked items and reviewed allocations. Keep unidentified receipts separate until matched. Use the agency's approved recognition basis for income. For the management bridge, distinguish newly booked items, write-offs or corrections, returns and cash receipts instead of comparing two unrelated totals.
The following records and amounts are invented to show the method. They are not customer results, industry benchmarks or a forecast of Covirage performance.
| Balance movement | Amount | Running balance |
|---|---|---|
| Opening outstanding | $20,000 | $20,000 |
| New booked commission | +$30,000 | $50,000 |
| Approved return adjustment | −$2,000 | $48,000 |
| Allocated receipts | −$25,000 | $23,000 |
Closing outstanding commission is $23,000. The $25,000 received does not equal the $30,000 newly booked, and the $5,000 difference alone does not explain the balance because the $2,000 adjustment also matters. Aging the $23,000 by expected settlement date provides the next diagnostic view.
This simple management bridge does not establish an accounting treatment, collectability assessment or financial-statement balance. Follow finance's policies for recognition, provisioning and settlement.
Bring a small, authorized sample to Covirage for insurance agencies and brokers. Use the sample to discuss the fields and views your business needs. A dashboard or AI analyst can help explore this question when the required data and definitions are available; missing records still need to be resolved.
Upload sample data to check its structure. Keep unnecessary personal, claims and policyholder details out of an initial sample. The sample check does not establish that every analysis in this guide is available automatically.
These references provide terminology or governance background. The worked example and proposed review method above are original illustrations, not prescribed industry standards.
Not necessarily. Receipts and income can have different timing. Use approved accounting definitions and a reconciled movement of outstanding items to explain the gap.