How to record MGA facility setup fees
Accounting for one-time fees charged to carriers by an MGA to establish a new underwriting facility or binder.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Accounts Receivable - Carrier | Asset | 5,000.00 | - |
| Professional Fee Income | Revenue | - | 5,000.00 |
💡 Accountant's Note
MGAs often charge insurance carriers a setup fee to cover the administrative and actuarial costs of launching a new underwriting program. This is recognized as service revenue.
Practitioner & Systems Framework
💻 ERP Architecture
Record as a direct invoice to the carrier entity outside of the standard policy administration system if necessary.
⚠️ Audit Flags
Revenue recognition timing if the setup process spans multiple reporting periods.
📄 Required Documentation
Binder agreement or facility setup contract, signed acceptance of terms, invoice.
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Discussion & Community Questions
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