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An account current is a statement given to individual agents to provide them with a snapshot of earned commission. These statements are common in the insurance industry, where individuals on the sales team need to know the amount of policies sold or canceled, premiums paid and other information that may affect the individual commission payments paid by the insurance company. In some ways, an account current statement is similar to a traditional financial statement prepared by accountants. The statements will list revenues, expenses, profits or losses and the related assets or liabilities.
Most insurance companies use a fairly technical accounting software program to maintain internal records. While the system will keep information in an aggregate fashion, the system will also have the ability to hold individual information relating to each employee’s account current. The purpose for this in the insurance industry comes from the payment of residuals from older insurance policies. As customers renew their insurance policies, the salesperson who sold that particular policy will receive a payment on the renewed policy. This information will show up on the individual’s commission payment stub so she can accurately track her paid commission on policies.
While individual sales workers will receive an account current for their activities, brokers may also receive a similar statement. Brokers typically receive a portion of commission from every sale made by workers under their supervision. The broker’s account current will often have several different details relating to commission payments made by the company. The statement may include each individual statement given to individual sales members and then have a summary for the broker’s activity. Brokers may have an individual office that works as a subsidiary to the home office for the insurance company, requiring the use of a financial statement to review the effectiveness of the office.
On an individual account current, assets and liabilities may not be present. These individuals do not often have significant assets they need to sell insurance policies. Individual insurance workers may be a single worker acting as an independent agent in a specific region. For these individuals, the account current may include reimbursements for the business use of personal assets. If this is the case, the statement may provide information on the reimbursement payments for tax purposes. Workers need this information to claim the reimbursements on their taxes and lower their overall tax liability. The statement is typically proof enough to support this tax deduction.
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