How to book fronting fee revenue
Recognizing the fee income earned for providing fronting services in an MGA or captive arrangement.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Premiums Payable to Carrier | Liability | 200.00 | - |
| Fronting Fee Income | Revenue | - | 200.00 |
💡 Accountant's Note
This entry recognizes the fronting fee by reducing the net premium payable to the carrier, effectively retaining the fee for the fronting provider's services.
Practitioner & Systems Framework
💻 ERP Architecture
Manual journal entry or automated deduction during carrier settlement runs.
⚠️ Audit Flags
Mismatches between the fronting percentage in the contract and the actual amount retained.
📄 Required Documentation
Fronting agreement and monthly premium settlement statement.
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Expert Analysis by Qusai Ahmad
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Related Journal Entries
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Premium Trust Account — Client Premium Received (Not Broker Revenue — Fiduciary Obligation)
Discussion & Community Questions
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