Financial Tips for Insurance Agents

Professional Services.png

Keeping accurate and organized finances is one of the most important responsibilities for insurance agents. You need to track your revenue, manage your expenses, and prepare for your tax filing for your business to achieve success.

In this blog post, we’ll provide a few tips that can help insurance agents run a financially-healthy business.

Use cloud software to track your business transactions

It’s crucial to maintain a general ledger that has all your business’s transactions accurately recorded and organized. The good news is this task is much easier with the help of cloud accounting software. It can connect with your online bank account and other cloud solutions and automatically receive all your transactions.  

When you log into your accounting software, all you’ll need to do is confirm your transactions are correct and perform your bank reconciliation. The time you would have spent on data entry can instead be used analyzing your books and various accounting reports so you can make savvy business decisions.

Expense management for insurance businesses

Expenses consist of any money spent or costs incurred through a business’s revenue generating efforts. If your business uses cloud technology, it will be easy to track most your expenses since they’re paid for directly with business funds (and your online bank account is synced with your general ledger). Some examples of common expenses include advertising expenses, administrative fees, business travel, and insurance.

However, some expenses have special rules or circumstances, making them more difficult to track. Here are some examples:

  • Client gifts, meals, and entertainment expenses – When it comes to giving gifts to clients, you can deduct up to $25 per client per year. The cost of client meals or entertainment are 50 percent tax deductible. Properly categorizing these expenses can be difficult for your bookkeeper so be sure to keep receipts and note what was purchased and who it was for.

  • Home office expenses – If you run your business from home, you can possibly deduct certain costs from your taxes. If you qualify, you must have the necessary documents to support your claim, like utility bills or paid invoices for repairs.

  • Mileage deduction – The costs you incur from driving for business purposes is most often tax deductible. You can calculate your deduction by keeping track of all your vehicle expenses throughout the year and figuring out what percentage is attributable to business travel. Your other option is simply to deduct 54 cents for each mile you put on your odometer for business-related drives. Note that 54 cents per mile is the IRS’s 2016 Standard Mileage Rate and will likely change next year.

Financial technology for insurance agents

Cloud accounting software isn’t the only technology insurance agents should use. The apps and software listed below can help you with your other financial responsibilities:

  • Receipt app – Keeping track of your minor business expenses is much easier when you use a receipt app on your mobile phone. You can take a photo of the receipt and the details are automatically imported into your financial records.

  • Mileage app – Recording the miles you drive for business is also easier with the help of a mobile app. Just launch the app when you start your drive and it will use GPS to track the exact distance you travel.

  • Cloud document storage – Holding onto your documents is an important part of financial management. You can store them in the cloud where they’ll be organized and accessible.

  • Bill payment software – Managing and paying your bills on time can be easily accomplished with modern bill payment software.

  • Payroll software – If you have employees, simplify payroll and employee management with the right software.

BookKeeping Express (BKE) provides accounting, bookkeeping, expense management, payroll, and other financial services for insurance agents. Visit our industries page to learn more.