Reconciling commission paid by insurers
How a brokerage can match insurers' commission payments on its bank statement to its books, approve what is missing and explain every leftover line.
By Achekam · · 4 min read · For Insurance businesses in South Africa, Nigeria, Kenya
Insurers rarely pay a broker one policy at a time. A single deposit arrives with a reference such as "COMM" and a month, covering dozens of policies, and the detail sits in a separate commission statement from the insurer's portal. Some months the deposit is lower than expected because commission on lapsed policies has been clawed back. Some months it arrives late.
For a brokerage, commission is the income that pays the rent, so the question each month is a plain one: did the money we were owed actually arrive, and are our books right about it?
This article walks through reconciling insurer commission in Achekam, for brokers in South Africa, Nigeria and Kenya.
Bringing the bank statement in
Statements are imported as files. Achekam accepts PDF, CSV, Excel, OFX, QIF, MT940 or CAMT.053. Bank feeds for South African banks are listed but each stays waiting until the bank approves access and the credentials are in place, and there are no feed connections for Nigerian or Kenyan banks, so the monthly import is the normal route.
Each import is checked so that the opening balance plus the movements equals the closing balance. If it does not, a page or a line is missing, and it is far better to find that out now than at the end of the reconciliation. Where your workspace has an AI model set up, it can read a scanned or unrecognised PDF statement, and every amount it reads must appear on the page.
Accepting matches one at a time
Once the statement is in, Achekam suggests matches between bank lines and entries already in your books. A person accepts each match. Nothing is matched silently.
That is worth the extra clicks. A commission deposit from one insurer and a claim settlement passing through for a client can look alike on a bank statement. The person accepting the match is the one who knows which is which.
Commission that is not yet in the books
Often the commission deposit is the first the books hear of it. A bank line with nothing to match becomes a suggested journal, and a person checks and approves it.
Check two things before approving. First, the account: commission income, not "other income" or a suspense account that nobody reviews. Second, the month: if the insurer's statement says the commission relates to the previous month and your accountant prefers to recognise it there, agree how you treat that before approving, not afterwards. If a commission journal does end up in the wrong place, correcting a journal posted to the wrong account explains the fix.
Every leftover line explained
A reconciliation completes only when there is no difference left, or when every leftover line has been explained. You cannot close it with an unexplained gap. AccountingTools walks through the general bank reconciliation process of comparing your cash records with the bank statement and adjusting the books.
Typical leftovers in a brokerage:
- a deposit from an insurer that you cannot yet tie to a commission statement;
- a client's premium paid into your account by mistake, which needs to go on to the insurer;
- bank charges not yet recorded;
- a payment for a fee invoice that has not been matched to the invoice.
Write the explanation as if your accountant will read it in a year's time, because they may.
Checking against the insurer's commission statement
The bank tells you what arrived. The insurer's commission statement tells you what it was for. Put them side by side, insurer by insurer:
| Check | What you are looking for |
|---|---|
| Statement total against the deposit | They should agree, or the difference should be explained |
| Clawbacks | Commission reversed on lapsed or cancelled policies |
| Deductions | Any fees or levies the insurer took off before paying |
| Timing | Statement month against the month the money arrived |
| Unknown policies | Commission on policies not on your book, which may belong to another broker |
Keep each commission statement in Document Centre, in a folder for the month, beside the bank statement. When a query comes months later, both documents are in one place. If an insurer asks you for supporting documents in return, sending claim documents by secure link shows how to share them without attachments.
After the reconciliation
Run the trial balance for the month. It shows each account for all time, for a period or at a date, and says whether debits equal credits. Look at commission income for the month: does it agree with the total of the insurers' statements you have accepted? The general ledger lists every posted line behind it if it does not.
Then close the month. Achekam lets months be soft-closed, hard-closed and locked, and a closed month refuses postings from every source. Before closing, the screen checks the ledger balances and that no posting suggestions, unposted bills or unmatched bank lines are waiting. Reopening a hard close needs a second approver, so a late commission adjustment cannot be slipped into a closed month by one person.
A monthly rhythm
- Download each bank statement as soon as the month ends.
- Download every insurer's commission statement for the same month.
- Import the bank statement and confirm the balance check.
- Accept matches and approve the suggested journals for new commission.
- Explain every leftover line.
- Compare each insurer's statement with its deposits.
- Run the trial balance, then close the month.
Payroll often follows straight after, and has its own approval rules; payroll in a small brokerage covers them.
The first month takes the longest, because you are learning each insurer's habits. After that, the reconciliation becomes a short monthly task, and a missing commission payment is spotted within weeks rather than at year end.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
