Common Questions
Direct answers for brokerage owners and controllers
The questions Canadian brokerage owners, principals, and controllers ask us most often — answered in plain language, with sources.
Applied Epic
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What is the Applied Epic accounting module?
It's the built-in part of Epic that maintains the general ledger and handles billing, trust, commissions, and month-end close.
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How do you run month-end close in Applied Epic?
Reconcile bank and trust, match carrier statements, reconcile direct-bill commissions, post accruals, and close the GL period — on a calendar.
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Does Applied Epic do accounting?
Yes — Epic has a built-in accounting module covering the GL, direct/agency bill, trust, reconciliation, and month-end close.
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How do you reconcile direct bill in Applied Epic?
Compare the commission the carrier reported and paid against what Epic expected on the policies, then resolve the differences.
Premium Trust Accounting
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How often should a brokerage reconcile its trust account?
Frequency requirements vary by provincial regulator; monthly reconciliation is widely treated as good practice. Confirm the requirement with your regulator.
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What happens if there's a premium trust shortfall?
It means trust cash is less than what you owe out of trust — a serious issue carrying regulatory and personal risk. Specific penalties vary by province.
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What is a premium trust account?
A segregated bank account holding client and insurer premium, kept separate from the brokerage's operating money.
Carrier & Commission Reconciliation
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Agency bill vs direct bill: what's the difference?
Agency bill: the brokerage bills and collects premium and remits the net to the insurer; direct bill: the insurer bills the client and pays the brokerage commission.
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How is contingent commission accounted for?
Contingent (profit-sharing) commissions are recognized when reasonably estimable or, more conservatively, when received or confirmed by the carrier.
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When does a brokerage recognize commission income?
Commission is recognized when it is earned — the policy is bound and effective and the brokerage has substantially performed — not when cash arrives.
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What is premium payable to insurers?
The liability for agency-bill premium collected but not yet remitted to the insurer, net of the brokerage's commission.
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How is producer commission split accounting handled?
Recognize the full commission as income and the producer's share as commission expense or payable, matched to the same period.
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What is carrier statement reconciliation?
Matching insurer statements to the amounts your system expected on those policies, then resolving the differences.
Regulation & Compliance
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What record-keeping rules apply to Canadian insurance brokerages?
Brokerages must keep proper financial books and records for both their provincial regulator and the CRA; confirm retention specifics with each.
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Is GST/HST charged on insurance brokerage commission?
Insurance commission is generally exempt from GST/HST, but some broker fees may be taxable — confirm with a CPA or the CRA.
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What are RIBO's trust account requirements?
RIBO expects Ontario brokers to hold premium in trust and report financial information; confirm the current specifics with RIBO.
Outsourcing Your Accounting
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In-house vs outsourced brokerage accounting: which is right?
In-house offers control; outsourcing offers depth and continuity. Many brokerages run a hybrid of internal billing plus outsourced reconciliation and close.
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How much does insurance brokerage bookkeeping cost?
Cost depends on premium volume, producer count, billing mix, and the state of your books; BrokerLedger charges a fixed monthly fee set on a discovery call.
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Should you outsource your brokerage's bookkeeping?
Outsource when reconciliations slip or a key person leaves — but only to a provider who specializes in brokerage accounting and your BMS.