How to book policy fee revenue
Recording non-refundable policy fees charged by the MGA or broker at the time of policy issuance.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Premium Receivable | Asset | 50.00 | - |
| Policy Fee Revenue | Revenue | - | 50.00 |
💡 Accountant's Note
Policy fees are typically fully earned at inception and are recorded separately from premium to ensure correct tax and commission calculations.
Practitioner & Systems Framework
💻 ERP Architecture
Captured as a line item fee within the invoicing or billing engine.
⚠️ Audit Flags
Inconsistent application of fees across similar risk profiles or failure to report fees for surplus lines tax.
📄 Required Documentation
Fee disclosure form and carrier appointment agreement authorizing fees.
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Expert Analysis by Qusai Ahmad
General Accountant Supervisor & IFRS Specialist
Specialized in SAP GUI automation and Middle Eastern tax compliance. Building digital tools for the next generation of finance leaders.
Related Journal Entries
Insurance Broking & MGA
Insurance Commission — Recognized at Policy Inception/Renewal (Point-in-Time)
Insurance Broking & MGA
Contingent Commission / Profit Sharing — Variable Consideration Constrained Until Carrier Determination
Insurance Broking & MGA
Premium Trust Account — Client Premium Received (Not Broker Revenue — Fiduciary Obligation)
Discussion & Community Questions
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