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Accounting Vs. The Front Office
Is there friction in your office between your accounting department and your service staff? Gail Franzen advises you to tackle the personality differences between accounting and customer service personnel through communication and standardized workflow processes. In talking with various agencies around the country, one thing they have in common is the conflict between the service staff and the accounting department. Misunderstandings arise between the two departments when they need to interact with one another and when their job functions affect one another. Much of what transpires in the accounting department depends on the invoicing being performed by the service staff. The service staff’s primary responsibility is servicing the client — not invoicing. From the accounting department’s perspective, time is wasted when the company statement and the invoice don’t agree. This frustration grows when the service staff is interrupted in the middle of an important task by the accounting department to verify and correct the discrepancy. More and more carriers are moving agencies from payment by account current statement to company statement, placing the burden of reconciling on the agency. The accounting department needs to match each item on the carrier statement to the invoice. Frequently, items aren’t invoiced or the premiums and commissions are wrong. INVOICING PROBLEMS Whether the invoice is direct bill or agency bill, the same issues and concerns arise. It’s not the invoicing process that’s the problem. All agency management systems have the ability to process invoices. The real issue is training and understanding the specific agency codes. Here are the most common problems: Incorrect commission percentages Incorrect premiums Incorrect tax and fee codes, such as agency fee vs. broker fee Incorrect payee (entering paper carrier instead of payee company) When there are a number of invoicing corrections on an account, the client’s ledger becomes difficult to read. The producer will either pass the task of collection to the CSR or will need to sit with the CSR to decipher the account before contacting the client. If monthly statements are mailed to the client, they’ll phone the agency confused about how much they should pay. WORKFLOW SOLUTIONS Let’s look at what’s causing the billing discrepancies. In today’s office, the invoicing previously handled by a senior CSR is now an assistant’s responsibility. The senior CSR might understand the repercussions from invoicing, but what about the assistants who are doing the invoicing? The assistant isn’t involved in receivables. Problems with billing errors are compounded when the service staff is backlogged. Developing and implementing effective workflows will eliminate most billing discrepancies. The process of creating your invoicing workflow should start with a task force, including service staff and accounting. Bringing the two departments together in the task force will encourage an environment of understanding. Task force members should determine agency guidelines for various areas, including binder billing, direct bill, agency bill, and invoice corrections. Once you’ve created your guidelines, continue the process by creating the most efficient workflow for your agency management system. Use this outline as a starting point to determine the areas on which your agency needs to concentrate: CREATING INVOICING GUIDELINES Responsibility and Timing Set responsibility for invoicing — Account Manager vs. Assistant When is a policy to be invoiced and if it’s to be binder billed Determine a timeline in which endorsements will be processed and invoiced from the date received from the carrier Determine a timeline in which a discrepancy notice from accounting will be resolved Determine when to bill a cancellation premium Policy Set Up Line of business code Writing Company vs. Parent Company vs. Broker Profit Center Producer, Account Manager Direct Bill Does your agency bill direct bill from the policy or from the statement? Do you bill annually or on an installment basis? Invoice Dates The invoice date is always ‘Today’s Date’ The transaction effective date is the effective date of the insurance transaction Future Bills Who prints and mails future invoices and when? Installment Invoices Make every effort to obtain the installment schedule from the carrier before invoicing Who prints and mails future installments and when? Invoice Printing and Distribution Determine if invoices are printed immediately or batch printed Set timeline in which invoices are to be mailed after printing Determine timeline to print and mail future installments Commission Verify commission percentage from carrier before invoicing If multiple commission percentages apply to one policy, determine if the premium is to be divided by line of coverage or to be rounded Verify producer commission before invoicing Invoice Memos Create standards for messages on invoices Invoice Corrections Based on your agency management system, determine if invoices are to be revised or voided and then re-invoiced Set guidelines for correcting installment plans and future bills TRAINING SOLUTIONS Once you’ve developed workflows, establish a training and implementation plan. When people fully understand the outcome of an action, they take more time and consideration in performing it. Consider an Insurance Accounting 101 training class for all service staff involved in the invoicing process. This isn’t an accounting class, but a class detailing what happens when an invoice is done. Explain the different areas affected by a single invoice. Use this outline for your class: Explain how company payables are created Explain how producer commissions are created Explain how different taxes and fee codes affect the different payable or income accounts Demonstrate the company payable reconciliation process Demonstrate the correct invoice premiums and installments Demonstrate how to make invoice corrections CONCLUSION Keep the lines of communication open between the accounting department and the service staff to reduce friction between the departments. Remind your staff that they need to take extra time at the beginning of the process to save time for everyone at the end of the process.
(Non-Web) Site Planning: Office Layout
'Even if you're on the right track, you'll get run over if you just sit there.' -- Will Rogers Many agency principals and their staffs are still sitting where they were 10 years ago-literally. They're still on the same patch of carpet in the same corner of the same room. Physical arrangement of the office reflects a business philosophy. It speaks more loudly than any verbal pronouncements of management. It certainly makes workflow easier or harder than it would be otherwise. The Independent Agency System has changed in organizational structure, technology utilization, compensation strategy, and marketing approach; yet its physical plant remains markedly unchanged. But there are rumblings that a new 'shape' is on the horizon-so this might be a good time to study the physical requirements of 'The Agency of Tomorrow' and create an agency of choice, rather than an agency of tradition. WHERE THE PRINCIPAL SITS Leaders are not the head of an organization; they are its heart. They should situate themselves in the heart of the agency. Hearing the buzz of the agency provides a continuous reality check. This helps leaders make decisions based on the way things are, rather than how it's assumed they 'should be.' Separation doesn't make the heart grow fonder; it makes the head more detached. When principals separate themselves, managers tend to follow suit. Managers are accountable for certain results-and when they can't see those who produce these results, they're operating under a considerable handicap. Management is not a solitary undertaking. You can think and create behind glass walls with an open door. COUNTERS: COUNTERINTUITIVE, COUNTERPRODUCTIVE Clients or prospects who visit a traditional agency often see a counter separating them from the agency staff person. There's enough to separate an agency from its clients: banks selling insurance, competing agencies, direct writers, company service centers, and so on. Why add another separation? Why keep your most important asset at arm's length? Why not welcome prospects and clients into your business home? Once visitors are in your office, what message does your environment send them? When prospects come in your office and are ushered into a comfortable (even plush) conference room or a producer's windowed office, they're being told how important they are to your agency. This is a good message. After they've become clients and they visit your office, they may see that the CSR who handles their account does not work in such a lavish office-maybe not in an office at all. Because clients are your agency's lifeblood, the people who handle their accounts should have the pretty, comfortable work areas, complete with windows. Agencies that have reorganized to use account managers (who can concentrate on the client-contact functions of service, placement, certificates, rounding, and so on) and account technicians (who specialize in policy-checking, correction-seeking, and follow-ups) realize that good physical placement increases their effectiveness. Account techs need quiet space to concentrate on technical detail. They must be out of any waiting client's sightline so that there's no pressure of courtesy-that is, so they won't have to interrupt their flow by getting up to help the client. The account techs must be situated close to each other so that they can back each other up comfortably during heavy work times (such as big renewal months) and each other's absences. Sitting account techs separately from the more numerous account managers actually encourages better electronic file documentation and internal E-mail communication, saving time and allowing each to focus on work rather than conversation. Perhaps most important, the account techs must be placed in quarters just as nice as the account managers, to demonstrate that their job role and accountability are as important as those of the account manager. This discourages a second-class image for some of the agency's most valuable employees. WHERE SHOULD PRODUCERS BE? If current clients are your agency's lifeblood, your prospects are its future. Producers who create new business grow your future. One chronic and potentially fatal disease of the Independent Agency System is the belief that producers are supposed to service what they write. Get over it! Producers should be salespeople. Written accounts need to be handled by account managers (what used to be CSRs). Overlap should be minimized. Salespeople must spend the vast majority of their work hours on active sales activity. Producers who spend most of their time working in the only place where your prospects don't go-your office-are in the wrong place. Only in the insurance industry is the outside producer inside most of the time. Most producers don't justify their annual income from new business sales. Management justifies their income with the book they've previously written and then pay CSRs, too, to handle those accounts. Placing producers in a service team (or, heaven forbid, letting them try to manage a service team) reinforces this insanity. Producers need space within the agency for very specific functions: Client meetings: Your agency needs at least one (maybe more, depending on the number of producers) impressive client-meeting room equipped with technology for rating, looking up information, and giving presentations. Sales-program development and account-rounding: Your agency needs a quiet, separate place for the producer to think (wild thought!) and be creative, away from the crowd. Preparing sales presentations: Your agency should provide technology tools, access to information, technical instruction (manuals, CDs, Internet), and practice space. Learning: Your agency needs an in-house educational space large enough to accommodate producers and other personnel who would benefit from educational opportunities. Some agencies are just starting to discuss and experiment with Producer Command Centers, which put the producers together to share ideas, brainstorm, and practice team-selling. (The compensation structure ensures that their 'sharing' is productive and not just fun.) Cubicles work for the identified producer tasks simply because they are 'tasks,' as opposed to eight-hour-a-day occupations. If the agency isn't as comfortable as a producer's Lexus, great! Producers with laptops and in-agency docking stations are mobile and able to communicate in and out of the agency. While our industry's agency-management system vendors need to refine their systems' ability to work better in this mode, this is clearly where we need to go-and systems are good enough now to begin going there. FOUND SPACE Transactional files take much less space than traditional paper files. Agencies that aren't keeping agency copies of standard-policy declaration pages save more space. Agencies that scan appropriate documents save even more space. Policy forms, whether client-specific or specimen, can be researched online, rather than saved on paper. All this space adds up. When account managers handle twice the number of accounts as their prior-generation counterparts, the agency needs fewer desks. Payroll dollars can be divided in larger increments to fewer people. As we realize that 'working' doesn't just mean 'in the office' but also from home or on the road, space can be reconfigured to be larger, airier, and more professional-looking. What recent college grad or young professional considering a change to the insurance industry wants to sit for eight hours a day in a rabbit hutch of a workstation? Any encouragement for young talent to join our industry is a good thing. THINK ABOUT THE MESSAGES YOU'RE SENDING Most agency principals would not put 'decorating talent' in their job descriptions, but maybe they should. You can be a brilliant success or an abject failure in creating a strong work environment. Many agency managers talk about building team spirit but don't have a space that can hold everyone at once. It's like having Thanksgiving dinner in separate rooms. Meeting space for your agency family requires features that are different from those of your client meeting space. Staff meeting space should encourage free thought, discussion, and fun. Here are some guidelines: Light, preferably natural light, stimulates thinking and openness. It discourages intellectual 'hiding' and creates energy. It's a necessity. Space should be flexible. You should be able to break down a large, all-agency-at-once room to more intimate spaces for department meetings, work groups, project teams, seminar work, and other activities for small groups. Display boards or facilities for informal projection should be available to stimulate group focus, keep group work on track, and serve as a credible record of the proceedings. Make sure that notes (flipchart sheets, electronic notes, print copies) are saved as long as necessary for reference, project management, and performance review. Avoid inspirational posters at all costs. Agencies that live up to those statements don't need to put them on the wall. People who work in agencies that don't heed such precepts view them on posters with an ironic twinkle (at best) and frustrated cynicism (at worst). Use artificial plants and flowers to communicate a low threshold for caregiving and a tendency toward disingenuousness. Or you can use real ones to convey your love of life and willingness to work to improve its beauty. Remember that colors, styles, and maintenance all convey a message. Orange shag carpets say, 'We're still in the '60s and we like it' (or 'We can't afford to get out of them'). Dirty, discolored carpet says, 'We've learned to live with problems.' A few carpet tears in high-traffic areas announce, 'Loss control is for you and not for us.' Mismatched patterns and colors bespeak haphazard decision-making and lack of focus. A color scheme, compatible artwork, pieces that make you look twice: these are not easy to put together, but they're worth the time and effort. Take time, enlist a talented family member, or seek professional decorating help-but make sure that the environment tells a story about what the agency wants to be. It will help get you there. DESK ARRANGEMENT Our business successes or failures are in large measure determined by how we work. How we work is heavily influenced by how our work space is arranged. Having your PC behind you indicates that it isn't needed for daily work on client accounts. Putting a guest chair on the side of your desk makes eye contact difficult. Look straight at your clients, and let them see visual information. As one CSR said recently (while creating a 'wish list' for the new office arrangement), 'Being able to see clients and their body language helps me read them. If I know what they're thinking, I can do better by them.' A REVOLUTIONARY THOUGHT If office rearranging is in your agency's future, the project may be bigger than you are. Take advantage of the talent and ideas in your own office. Create a space-planning table in a conference room to allow your agency colleagues-from receptionist to principals-to sketch office arrangements, write down ideas, recommend colors, design a desk arrangement, or express wish-list items. Create a master plan. Disregard the way you've always done things, and have some fun. You can make the place you work help achieve what you want in your work. and Short, Certified Public Accountants, which statements are prepared in ...
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