---
title: "Month-End Close for an Insurance Agency: A Commission-First Checklist — Lapidar"
url: https://getlapidar.com/guides/insurance-agency-month-end-close/
description: "The order to close an insurance agency’s month when commission is the main revenue: download statements, reconcile, post, settle account currents, pay producers, reconcile the premium trust account, book accruals and run reports. General information, not accounting, legal or tax advice."
last_modified: "2026-10-13"
source: getlapidar.com (HTML converted to Markdown at the edge)
---

Guide · 7 min read

# Month-end close for an insurance agency: a commission-first checklist

**Short answer.** Close the month in the order the money depends on: download every carrier statement, reconcile them against your agency management system, post the reconciled commission, settle agency bill account currents, calculate and pay producers from commission received, reconcile the premium trust account to the bank, book any accruals your accountant uses, then run and file the reports. Each step uses the output of the one before it, so skipping ahead usually means redoing work. This is general information, not accounting, legal or tax advice.

[Open an account — founding pilot](https://app.getlapidar.com/signup) [See a sample report](https://getlapidar.com/sample-report/)

Much of an agency’s month-end depends on carrier statements arriving. The close goes faster when every step knows what it is waiting for.

By Lapidar, the team building it · October 13, 2026

## TL;DR

- Commission comes first because producer pay, trust balances and the P&L all depend on it.
- The reconciliation itself has its own checklist; the close is the sequence around it.
- Producers are paid from reconciled, posted commission, not from expected figures.
- Trust account reconciliation and accruals follow your state’s rules and your accountant’s method. Ask both.

This guide is for owners and bookkeepers at US independent P&C agencies who close the books each month. It is about the order of the close. The line-by-line work of matching a carrier statement to your book is in the [commission reconciliation checklist](https://getlapidar.com/guides/commission-reconciliation-checklist/); how cash and accrual treat the same month is in [insurance agency commission accounting](https://getlapidar.com/guides/insurance-agency-commission-accounting/). We link to both rather than repeat them. Nothing here is accounting, legal or tax advice; your accountant, agency agreements and state law govern.

## What is the order of a commission-first close?

1. Download and archive every carrier statement for the month.
2. Reconcile each statement against the agency management system.
3. Post the reconciled commission and open the follow-ups.
4. Settle agency bill account currents.
5. Calculate and pay producers.
6. Reconcile the premium trust account.
7. Book accruals, if your accountant uses them.
8. Run, review and file the month’s reports.

Each step below says what it needs from the one before.

## Step 1: How do you collect every statement?

Make a list of every carrier, aggregator and [MGA](https://getlapidar.com/glossary/managing-general-agent/) that pays you, with where each statement comes from (portal, email, download feed) and the day it usually appears. At close, tick each one off. A missing statement holds up every step after it, and it is easier to chase on day three than on day twenty. Save each file with the carrier, period and date received, in one place; [how to download and archive commission statements](https://getlapidar.com/guides/how-to-download-and-archive-commission-statements/) covers naming and retention.

## Step 2: Where does reconciliation fit in the close?

Reconciliation is the step everything else waits for: match each statement line to a policy in your system, and record what is missing, underpaid or paid twice. The full routine is in the [commission reconciliation checklist](https://getlapidar.com/guides/commission-reconciliation-checklist/). For the close, the output that matters is a list per carrier: amount received, amount expected, differences with a reason, and which differences you will dispute. If a statement isn’t reconciled by the date you pay producers, decide in advance whether those lines wait a month or are paid and corrected later, and apply the same rule every month.

## Step 3: What do you post after reconciling?

Post reconciled commission by carrier and policy, the way your accountant has set up the books, so revenue in the ledger matches the statements. Open a follow-up for every unresolved difference, with an owner and a date, and send disputes to carriers while the month is fresh; [writing a commission discrepancy letter](https://getlapidar.com/guides/commission-discrepancy-letter/) has a template. Many agencies post chargebacks and return commission as negatives against the original policy rather than netting them into a total, so they stay visible; follow your accountant’s method.

## Step 4: How does the account current fit in?

For [agency bill](https://getlapidar.com/glossary/agency-bill/) carriers, the [account current](https://getlapidar.com/glossary/account-current/) is both a statement and a bill. Check it line by line against your invoices before you remit ([agency bill reconciliation](https://getlapidar.com/guides/agency-bill-vs-direct-bill-commission-reconciliation/)), make sure items returned or cancelled during the month are reflected, and remit by the due date in your agency agreement. Unpaid client invoices are a collections question, covered in [agency bill collections](https://getlapidar.com/guides/agency-bill-collections/).

## Step 5: When are producers paid in the close?

After steps 2 to 4, not before. Producer statements should be built from posted, reconciled commission so every payout traces to a carrier line, with chargebacks netted only as the producer agreement allows. How to check the result is in [how to audit producer commission payouts](https://getlapidar.com/guides/how-to-audit-producer-commission-payouts/), and how splits are structured in [producer commission splits](https://getlapidar.com/guides/producer-commission-splits/).

## Step 6: How do you reconcile the premium trust account?

In many states, premium your agency collects belongs to insurers or insureds until it is remitted. Florida’s statute, for example, says such premiums and return premiums “are trust funds received by the licensee in a fiduciary capacity” and requires books and records the department can inspect ([Florida Statutes §626.561](https://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0600-0699/0626/Sections/0626.561.html)). Whether you need a separate account, when commission may be moved out and what records are kept depend on your state; see [premium trust account](https://getlapidar.com/glossary/premium-trust-account/).

A monthly reconciliation usually compares three things: the bank statement balance, the trust balance in your ledger, and the detail of what is owed (premium due to carriers and return premium due to clients). Explain every difference. Earned commission still sitting in the trust account can be transferred only as your state allows, and any agency money put in to cover a shortfall should be recorded as such. Ask your accountant and your state insurance department what your state requires.

## Step 7: Should you book commission accruals?

That depends on whether your books are kept on a cash or accrual basis, which is your accountant’s call. On an accrual basis, commission earned in the month but not yet on a statement may be estimated and reversed when the statement arrives; on a cash basis it isn’t booked until received. The differences, and what to ask your bookkeeper, are in [cash and accrual for the same month](https://getlapidar.com/guides/insurance-agency-commission-accounting/#cash-accrual) and [questions for month end](https://getlapidar.com/guides/insurance-agency-commission-accounting/#close). Contingent and profit-sharing income has its own timing questions, covered in the commission accounting guide.

## Step 8: Which reports close the month?

- Commission received by carrier, against expected, with open differences and disputes.
- Producer statements and the payout tie-out.
- Trust account reconciliation, signed off.
- Agency bill receivables by age.
- The P&L and balance sheet from your accountant, with accruals marked.
- A short list of what carries into next month: missing statements, unresolved lines, chargebacks to recover.

File them together with the statements, so next month starts from this month’s open items. Some owners also track a few [agency KPIs](https://getlapidar.com/guides/insurance-agency-kpis/) from the same numbers.

## Where Lapidar fits

Lapidar is built for step 2: checking carrier statements and account currents line by line against your book and your schedules, and flagging missing, underpaid and paid-twice commission. It doesn’t post to your ledger, pay producers or reconcile bank accounts. It is in its founding pilot, it has no customers yet, and we’ll say so until that changes.

## Frequently asked questions

### What is the first step of an insurance agency month-end close?

Collecting every carrier statement for the month. Nothing downstream, from reconciliation to producer pay, can be finished while a statement is missing.

### How is the month-end close different from commission reconciliation?

Reconciliation matches each carrier statement to your book. The close is the wider sequence around it: posting, account currents, producer payouts, trust account reconciliation, accruals and reports.

### Should producers be paid before carrier statements are reconciled?

Most agencies avoid it. Paying from reconciled commission means every payout traces to a carrier line. If you must pay earlier, use a fixed rule for correcting it the next month.

### Does an agency have to reconcile its premium trust account monthly?

Rules differ by state. Many agencies reconcile monthly as a matter of practice. Ask your state insurance department and your accountant what applies to you.

## Sources

1. The Florida Legislature, [Florida Statutes §626.561, Reporting and accounting for funds](https://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0600-0699/0626/Sections/0626.561.html). Retrieved October 13, 2026.

Lapidar is [commission reconciliation software for independent insurance agencies](https://getlapidar.com/), in its founding pilot. Related: [account current](https://getlapidar.com/glossary/account-current/) · [premium trust account](https://getlapidar.com/glossary/premium-trust-account/) · [commission reconciliation](https://getlapidar.com/glossary/commission-reconciliation/) · [producer split](https://getlapidar.com/glossary/producer-split/).

In this guide

1. [The sequence at a glance](https://getlapidar.com/guides/insurance-agency-month-end-close/#sequence)
2. [1. Download statements](https://getlapidar.com/guides/insurance-agency-month-end-close/#download)
3. [2. Reconcile](https://getlapidar.com/guides/insurance-agency-month-end-close/#reconcile)
4. [3. Post](https://getlapidar.com/guides/insurance-agency-month-end-close/#post)
5. [4. Account current](https://getlapidar.com/guides/insurance-agency-month-end-close/#account-current)
6. [5. Producer payouts](https://getlapidar.com/guides/insurance-agency-month-end-close/#producers)
7. [6. Trust account reconciliation](https://getlapidar.com/guides/insurance-agency-month-end-close/#trust)
8. [7. Accruals](https://getlapidar.com/guides/insurance-agency-month-end-close/#accruals)
9. [8. Reports](https://getlapidar.com/guides/insurance-agency-month-end-close/#reports)
10. [Where Lapidar fits](https://getlapidar.com/guides/insurance-agency-month-end-close/#where-lapidar-fits)
11. [Frequently asked questions](https://getlapidar.com/guides/insurance-agency-month-end-close/#faq)
12. [Sources](https://getlapidar.com/guides/insurance-agency-month-end-close/#sources)

See how a reconciliation report totals missing, underpaid and paid-twice commission by carrier.

[See a sample report](https://getlapidar.com/sample-report/)

## Check every statement line against your book.

Every carrier formats its statements differently, and the lines rarely match your records on the first pass. Lapidar checks each statement line by line against your book and flags missing, underpaid and paid-twice commissions. Read [how the founding pilot works](https://getlapidar.com/pilot/).

[Open an account — founding pilot](https://app.getlapidar.com/signup)

[See a sample report](https://getlapidar.com/sample-report/)