Cash from a carrier has hit the bank account and the accompanying commission statement has been retrieved. That part was relatively easier than the manual data entry, spreadsheet munging, manual reconciliation, and handling of discrepancies with the service team that will follow.
The thousands of unique carrier statement formats, inconsistent availability and structure of key data, and differences between carrier and AMS data, mean single statements can take hours or longer to get mostly reconciled. Broker accounting teams are all-too familiar with the unfortunate drudgery of the multi-step direct-bill reconciliation workflow.
Many accounting leaders don’t believe the hours spent looking up and entering transactions (potentially totalling just a few dollars or cents!) to be the high-value work they’d like their team spending time on. So historically, teams have adopted a few processes to ease the direct bill process:
- Utilizing AMS importers, which can reduce or eliminate data entry for a statement. However, many teams say that instead of data entry, they spend their time munging spreadsheets, reformatting and reordering, columns, removing non-commission rows or subtotals, adding VLOOKUPs, and more just to prepare the files to be accepted by their rigid legacy importer. Once imported, minor differences in policy data cause transactions to be completely rejected or dropped, creating troubleshooting. Many teams, especially of acquisitive firms, simply say that absent a small set of statements, the importers don’t actually save them time, and they prefer to key most in.
- Outsourcing via BPOs is a common strategy to reduce costs but comes with new challenges, foremost by the new team that must be trained and managed. Errors and 48-72 hour turnaround times create process bottlenecks, leaving some leaders to conclude that the marginal cost savings may simply not be worth it, and to bring their operations back in-house.
- Light/hybrid automations, sometimes branded as “bots” or “RPA”. Vendors of these solutions will build a new bot for each statement on top of a generalized task automation software toolkit. Being customized means these bots need to be continuously managed, as they’re inherently fragile and break upon simple format or process changes. These solutions also don’t natively integrate with agency management systems APIs, using a desktop-based click simulated approach, which vastly restricts their speed and accuracy. Many broker IT and finance leaders report lower success with applying general RPA solutions to direct bill. “Some statements are maybe 9-10% easier, but it’s pretty hard to argue it’s worth it given the constant additional headache we now have of a bot that breaks several times a month”, remarks one brokerage CIO.
While broker finance teams in the past were limited to these options, the emergence of purpose-built revenue automation brings far more powerful capabilities and relief to broker finance teams. A cornerstone of purpose-built revenue automation platform for brokers is highly specialized carrier statement understanding and auto-reconciliation models. These two proprietary layers work combined, extract transactions from 100% of carrier statements (scanned snail mail, PDFs, spreadsheets), and auto-reconcile to policies in your AMS.
Revenue Automation in Action
In addition to specialized carrier statement recognition and auto-reconciliation, purpose-built revenue automation also streamlines realtime exception management, integrates with the AMS via native integrations. The most advanced teams will also leverage new capabilities like realtime variance tracking and compensation insights.
