How to record premium finance company payments
Recording the receipt of full policy premium from a third-party premium finance company on behalf of the insured.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Fiduciary Cash | Asset | 10,000.00 | - |
| Premiums Receivable | Asset | - | 10,000.00 |
💡 Accountant's Note
When a premium finance company funds a policy, the broker receives the full premium amount (net of any down payment already paid). This clears the insured's receivable balance in the fiduciary ledger.
Practitioner & Systems Framework
💻 ERP Architecture
Match the PFC payment to the specific policy invoice in the agency management system.
⚠️ Audit Flags
Discrepancies between finance contract amounts and bank deposits.
📄 Required Documentation
Premium finance agreement and bank deposit confirmation.
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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
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Premium Trust Account — Client Premium Received (Not Broker Revenue — Fiduciary Obligation)
Discussion & Community Questions
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