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... company into different markets, services and activities, and new relationship...n; c) products manufactured or services performed which, subsequent to th...

Don't Forget The Auditing Process
Are your emplo...ust do it ! There are five options: Auditing through weekly meetings; auditing as a group; employees auditing one another; monthly ind...

Work Flow Procedures Manual-Commercial Audit Procedure
COMMERCIAL INSURANCE AUDIT PROCEDURE In most agencies, audits are processed much like all other types of mail. Because of the adverse financial impact that an audit can have upon an agency, it is our opinion that a specialized processing take place. Unlike other company billings that are normally controlled by the CSR/Marketer, it is our feeling that the audits be under the direct supervision of the bookkeeper or financial manager. 1. All audits when, received by the Financial Manager/Bookkeeper are logged in on Form audit.frm 2. Financial Manager/Bookkeeper establishes a follow up date 5 days prior to the date that an audit can be returned to the company for direct collection. 3. Financial Manager/Bookkeeper notes on the agency copy of the audit the follow up date and forwards the audit to the CSR/Marketer for processing. 4. CSR/Marketer reviews the Audit confirming that the correct rates and exposure units have been used. 5. If audit is incorrect, immediately return to the company to be reissued and notify the Financial Manager/Bookkeeper. 6. If audit is correct, CSR/Marketer invoices the audit and mails to customer with Cover Letter. Dear : Enclosed you find the final audit on your _____ policy, number ______, which expired _______ . I believe that the audit is correct after having verified the rates and mathematical extensions. However, if you find any errors in the exposure information, please call me within three working days and return the original audit to me for correction. Audits represent fully earned premium on an expired policy, and are subject to special handling procedures between our office and . We, therefore, require your payment within 15 days. Sincerely, Enclosure 7. CSR/Marketer verifies the follow up date established by the Financial Manager/Bookkeeper. 8. If the customer remits the payment prior to the suspense date, Financial Manager/Bookkeeper notifies the CSR/Marketer and removes the follow up. 9. The CSR/Marketer updates the customer's electronic file and files appropriate paper in the transactional file. 10. If the additional audit premium is not paid on time, the Financial Manager/Bookkeeper notifies the CSR/Marketer and Producer. 11. The CSR/Marketer and Producer then have 24 hours to make a decision (based upon the agency's policy) whether or not to Contact the customer and collect the money immediately Advise the Financial Manager/Bookkeeper to return the audit for direct collection Advise the Financial Manager/Bookkeeper that they will guarantee the audit premium and to allow the cut-off date to pass

... you are in the market for claim-auditing services, require the prospective au..., specializes in the evaluation and auditing of workers' compensation, liabili...

Accounting Audits And Reviews: Worth The Expense
Agencies can avoid a lot of grief by obtaining annual accountant’s reviews or audits. An audit can catch innocent but expensive mistakes and allow you to correct mistakes while the pain is still relatively minor. In this document, Chris Burand uses real world examples to illustrate the value of accountant’s audits. I recommend that every agency get an annual accountant’s review or audit. Although this might seem like an unnecessary expense for a small, privately held business, it’s a valuable check. To understand what can happen without one, consider the following situations I’ve encountered in just the past 18 months: Problem: An agency’s producers were paid significantly more than their contracts stipulated. Reason: The producers talked the agency’s CSRs into increasing the commission percentages on the agency’s agency management system. Problem: The amount one agency recorded for its producers’ compensation was significantly less than the amount the producers actually made. Reason: Who knows? Problem: An agency’s accounts receivable didn’t match the amount being billed. Reason: The agency wasn’t billing some clients, but was still recording those accounts as receivables. Problem: An agency was missing $100,000. Reason: The owner forgot to deposit the checks. Problem: An agency didn’t have enough cash to pay its bills, although its bank statements showed plenty of cash. Reason: This remains a mystery, and the agency is still working to resolve the problem. Problem: An agency’s trust ratio (cash plus accounts receivable, divided by accounts payable) was strong, but it was having problems paying its companies on time. Reason: Because a huge portion of the agency’s accounts receivable was uncollectible, its realistic trust ratio was actually quite poor. Problem: An agency had to be sold at a significant discount from what the ownership had believed it was worth. Reason: The agency had been entering pre-bills as accounts receivable, which is an asset, without entering an offsetting liability. Problem: An interested buyer eventually decided to pass on an agency. Reason: Too many of the agency’s records weren’t reconcilable. By the time the seller got the agency records in order, he couldn’t find a buyer willing to pay nearly as much as the initial buyer had offered. The monetary losses these incidents caused are obvious, but the problems didn’t end there. Lives were turned upside down. Retirement plans suffered sudden, drastic changes. Friendships and partnerships were destroyed. Lifetimes of work went down the drain when agencies were sold for pennies on the dollar. These agencies could’ve avoided much of this grief by obtaining annual accountant’s reviews or audits. All the problems described above were innocent but expensive mistakes. An audit or accountant’s review could’ve caught them and allowed the agencies to correct their mistakes while the pain was still relatively minor. Our industry is vulnerable to accounting problems because most agency owners are sales-oriented and have limited accounting backgrounds. Also, many of them mistakenly believe that their tax accountant is checking for problems. Unless you specifically ask your accountant to audit your books, they probably won’t. For example, in the agency missing $100,000, I asked the tax accountant if he suspected a problem. He replied, 'Yes, but I was only asked to do the taxes.' That was all he was hired to do. If one of the partners had a unique way of depositing checks, who was he to question it? Agencies also need reviews or audits because virtually all of them, even publicly traded ones, mix cash accounting and accrual accounting practices. Although this is inevitable in our industry, it can and does cause serious errors. As cited above, many agencies enter receivables without the offsetting liabilities because they’re mixing cash and accrual accounting. If an agency has multiple owners, it’s especially important to have correct books before a buy-sell agreement is triggered. A departing partner could be quite unhappy if he learns from a last-minute discovery of an accounting error that his shares are worth less than he thought. Obtaining annual reviews or audits will also make it easier for you to sell your agency and might increase the price. By demonstrating your professionalism, regular audits or reviews might also make it easier for you to get company appointments. With the amount of money running through insurance agencies today, mistakes happen, but an annual accountant’s review or audit can help catch them. Who knows — maybe next year you’ll get a great offer for your agency, only to find that because certain key numbers don’t add up, the deal falls through. Isn’t preventing that worth the cost of an audit?