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Insurance Accounting Outsourcing – The Smarter Way for Agencies to Grow
Insurance businesses in any country across the world play a crucial role in the well-being of citizens. And not being limited to that, they also contribute to the nation’s financial strength and stability. This is achieved through risk management, allocations to claimants, and cash mobilization.
All these things considered, there emerges the utter need to establish and maintain a solid financial system essentially required to meet standards implemented by national and international regulatory bodies such as The National Association of Insurance Commissioners (NAIC) and The International Association of Insurance Supervisors (IAIS). And to insurance compliance, an efficient accounting system is everything an insurance business must have in place.
Why Is Accounting Important in Insurance?
Accountants in an insurance agency are required to handle various tasks daily. These tasks range from maintaining financial records, preparing monthly/quarterly/yearly financial reports, and management reports. They also involve processing payroll, carrying out carrier statement reconciliation, retail agent reconciliation, and tax preparation.
However, it often becomes difficult to manage all these responsibilities due to various factors like accounting backlog, increased rate of financial transactions, tax-norm complexities, back-office issues, and to name a few. Since accounting for insurance agencies is already a challenging business aspect, the factors discussed can quickly make accounts management a big hurdle. These are also some of the big reasons insurance agencies usually outsource insurance accounting services which save them costs and bring them a series of other significant benefits that help them grow.
Why Outsourcing Insurance Agency Accounting is a Smart Move to Grow?
You may find that it doesn’t make sense for you or your particular agency. But, there are some instances where outsourcing is undoubtedly worth considering. For example, if you don’t yet have a full-time bookkeeper, it might make sense to consider outsourcing your insurance agency accounting. If you’re already paying someone to help with your books, it might be worth comparing the cost of paying someone in-house versus the cost of getting outside help.
Here are a couple of other considerations where outsourcing could be a great choice:
If you have a sudden increase in business and need to increase your accounting staff quickly and affordably.
If you want to reduce your employee expenses by eliminating or reducing health insurance or retirement benefits for in-house accountants.
Access Knowledgeable Insurance Accounting Specialist
Accounting outsourcing brings valuable expertise into your agency. Your bookkeeper or accountant may not have as much experience as someone who has been in the industry for years. The right accountants will provide valuable knowledge that can help improve the way you run your business.
In addition, having someone on staff who specializes in insurance agency accounting can help make running your business smoother and more efficient. They will be able to take care of the details that the average accountant doesn’t see when they’re looking at accounting reports or tax returns.
You gain access to experts who can help maximize your write-offs and minimize your tax burden during tax season. These experts also can help identify errors that could cost you time and money down the road.
Manage Financial Situation Well
In recent years, accounting has been gaining a lot of attention due to many factors that affect the general economic system. The most important of them are the uncertainty of the financial market and cyber fraud. Accounting is really important today but many agency owners do not have enough time to deal with it. That is why they transfer this responsibility to another company.
Insurance accounting is not just a task that you can delegate to a clerical staff member. It’s a complex task of maintaining and organizing the financial records of your agency to keep it prepared to deal with different financial situations effectively. If you’re an insurance agency owner, you may want to consider outsourcing insurance agency accounting.
Clear Communication & Expert Guidance
A strong relationship requires open and honest communication, and a service like accounting, which requires a level of intimacy with your insurance business, will only function for you if both parties are on the same page. So be upfront with your outsourced firm about your needs and the present status of your books from the outset.
Signing up with a reliable provider will ensure they collect all relevant and required information from you; this will assist them in identifying issues that need to be addressed and developing appropriate solutions for all of your accounting concerns.
Keep in mind that a trusted outsourcing firm will establish clear communication to help you have a clear idea of where your company stands financially and what can be done to improve things in the future.
One of the key benefits of outsourcing your insurance agency accounting is to save time. The relationship between you and an outsourced accountant will help make running your business easier. Having someone who knows how to do these things will save you time. It will also make running the core business less stressful for everyone involved.
In addition, the amount of time you spend running your business will increase because you won’t have to worry about keeping up with its financial aspects. All you need to do is review the accounting work done by your outsourcing partner. Then, you can better utilize this saved time to prepare growth plans and appropriately execute the same.
Having correct insurance accounting principles in place is the first step to a more stable financial future. With the consistent support of your outsourced accounting partner, you’re better prepared to take on running your insurance agency’s financial operations efficiently. Additionally, you can focus on upholding your core duty to your policyholders. And if you find yourself in doubt, the team at Cogneesol is here to help.
We are a globally trusted insurance bpo firm serving clients (carriers, agencies, MGAs, MGUs) since 2008. With a team of insurance accounting specialists, we are currently serving 30+ clients worldwide with agency accounting services while ensuring the service quality remains unmatched.
In addition, having the expertise to operate a variety of accounting software used in insurance, we provide complete assurance of meeting accounting standards and guidelines applicable to your insurance line by accurately maintaining financial records and preparing tax returns.
Ready to outsource insurance accounting services? Then, talk to one of our experts to discuss our customized services and flexible pricing plans in detail; dial +1 646-688-2821 or send an email to [email protected]
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