Can Premium Accounting handle both agency bill and direct bill business?

Yes. Both billing models are supported natively with correct accounting treatment.

Can agency bill and direct bill exist in the same system?

Yes. Premium Accounting supports mixed billing across programs and carriers.

Does Premium Accounting reduce spreadsheet usage for billing reconciliation?

Yes. Premium Accounting replaces spreadsheet-based reconciliation with rules-based workflows.

Agency Bill vs Direct Bill Accounting Explained

Q: Do agency bill and direct bill require different accounting logic?

Yes. They behave differently and must be handled separately to avoid reconciliation issues.

Agency bill and direct bill accounting look similar on the surface. In practice, they behave very differently. Many MGA and wholesale accounting problems come from treating these billing models the same way. When systems are not designed to handle both, spreadsheets become the workaround. Premium Accounting is built to support both agency bill and direct bill accounting correctly, within the same premium accounting framework.

What Is Agency Bill Accounting?

In agency bill accounting:

The MGA or broker bills the insured directly
Premium is collected by the MGA or broker
Funds are later remitted to the carrier
The MGA or broker temporarily holds premium funds

Accounting teams must track:

Receivables from insureds
Payables to carriers
Timing differences between collection and remittance
Adjustments from endorsements and cancellations

This creates fiduciary and reconciliation complexity.

What Is Direct Bill Accounting?

In direct bill accounting:

The carrier bills the insured directly
The insured pays the carrier
The MGA or broker receives commissions separately

Accounting teams must track:

Commission receivables
Commission statements from carriers
Timing differences between earned and paid commissions
Reconciliation between carrier statements and internal records

Even without collecting premium, accounting complexity remains high.

Why Treating Agency Bill and Direct Bill the Same Causes Problems

Many systems attempt to handle both billing models with the same accounting logic.

This leads to:

Incorrect receivable and payable balances
Confusion over what has been collected versus earned
Manual spreadsheet reconciliation
Difficulty explaining balances at close

Agency bill and direct bill require different accounting treatment, even when they exist side by side.

How Premium Accounting Supports Both Billing Models

Premium Accounting is designed to handle both agency bill and direct bill workflows natively.

For agency bill:

Invoices generate receivables
Payments apply to receivables
Payables and settlements track carrier obligations

For direct bill:

Commission activity is tracked separately
Statements reconcile against expected commissions
No artificial receivables are created

Both models coexist cleanly in the same premium subledger.

Supports Mixed Billing Across Programs and Carriers

Many MGAs and wholesalers manage:

Agency bill programs
Direct bill programs
Mixed billing across carriers

Premium Accounting supports:

Correct accounting treatment by billing model
Visibility into balances by carrier and program
Accurate reconciliation without parallel spreadsheets

This allows finance teams to manage complexity without fragmentation.

Keeps Billing Models Aligned With Accounting Outcomes

Billing model handling in Premium Accounting flows into:

Accounts receivable and payable
Payment application logic
Netting and settlement workflows
Transaction history and audit trail
Synchronization to the accounting ledger

This ensures billing model differences are reflected correctly in financial reporting. To see how this fits into broader workflows, review how Premium Accounting integrates with insurance management systems and accounting ledgers.