Insurance agencies that don’t have a good software system in place are missing out on a host of benefits that can make them more productive and profitable. After all, there’s a great deal to be done in their offices. In addition to managing policies, serving current clients and seeking new prospects, professionals must make time to analyze the firm’s financial activities to better plan for continued growth. Insurance accounting software can help with that.
The right solution should make it easy to perform important accounting functions in one intuitive, integrated system. You shouldn’t have to use different vendors for accounts receivable, payroll and budgeting applications. When all your data is in one place, your reporting will be more accurate and faster to obtain.
In this guide, we cover the functionality insurance providers should be aware of when evaluating a new system, as well as best practices for comparing solutions. Potential buyers will also learn the difference between the two main software deployment options available in today’s market.
Here's what we'll discuss:
Insurance accounting systems make it possible for agencies to have a “paperless” office, meaning documentation is stored digitally.
Software is capable of incorporating multiple payers in a policy, policies in multiple currencies and carriers with multiple brands into an organized and accessible information system. It can help target individual information as well; open item features can help insurers match payments to individual charges. The ability to process heavy amounts of data quickly is especially important due to high complexity and volume of data.
It’s important to acknowledge that this may not be your first time researching insurance accounting software. In a recent survey of accounting software buyers, we found 58 percent of respondents were hoping to replace or upgrade their current solution.
One of the main signs the time is right for an IT replacement is if you feel like you’ve outgrown your current setup. When your provider is no longer able to support the amount of data your company has in its files, you should start looking for a system that is able to scale with you as you grow.
In addition to core modules and CRM/billing features like open item accounting and collections control, insurance accounting software may include some of the following:
|Core accounting||This includes all of the basic functions needed to balance your agency’s books, such as general ledger functionality, the ability to track accounts payable (A/P) and accounts receivable (A/R), fixed assets and bank reconciliation.|
|Integration with insurance systems||The most advanced systems will incorporate the accounting with the insurance features and functionality. Even dedicated accounting solutions, however, should integrate with popular solutions like Majesco and StoneRiver.|
|Document management||Insurance companies deal with many different kinds of documents, so it’s important to have a system that manages those efficiently. Effective document management for an insurance software program will support cataloguing, template-based document creation, advanced viewing/annotating/archiving, multi-lingual translations and multiple distribution options like email, fax or postal.|
|Policy workflow||Insurance software should be able to follow the customer through the entire process from lead generation and the initial quote through to underwriting and issuing the policy. From there, it needs to support billing/payments, policy changes, amendments, legal changes and direct integration into the claims process.|
|Claims processing||Effective claims management makes for a more accurate and efficient claim workflow process. This feature will include online support to open the claim, irregularities and fraud detection, secure payments, subrogation and other claims-related functionality.|
|Audit management||Insurance accounting software eliminates the paper and the field worker associated with the audit process, managing electronic receipts, audit requests and progress reports faster and more reliably.|
Here are some of the benefits insurance companies can capitalize on after implementing accounting software:
Improved productivity. Staff has more time to focus on serving clients and growing the business when they can rely on software to automate daily, time-consuming tasks. This is especially true for first-time software buyers who are switching to a digital system after years of entering data manually. Most systems have developed native mobile apps and enable remote access, which make it easier for employees to submit information and evaluate the business’ books remotely.
Greater visibility into company finances. Executives will be able to make more informed decisions for the agency’s future when they have a clearer picture of its financial trends. Many systems have robust reporting capabilities that allow executives to drill down on every detail related to cash flow management.
More accurate budgeting. When data is on different systems, it takes a great deal of time and effort to format it and generate budgets. You also run the risk of missing line items while transferring data. Software allows users to automate and consolidate information so they no longer have to update multiple spreadsheets.
The frequent periods of many complex transactions make access to technical support an important feature to consider in order to avoid confusing setbacks. Viewing payment terms and schedules should also be a prominent feature of any software package. Billing and collection process tools are useful as well.
When evaluating these systems, buyers should consider the following:
Potential buyers should also pay special attention to how many training services a vendor provides. You may be impressed with a product’s many features during the demo phase of the selection process, only to discover it’s extremely difficult to learn how to access those features.
Set yourself up for a smooth implementation by noting the vendor’s training resources for your team. These may include online guides, tutorial videos, webinars and classes.
There are two main deployment options for insurance accounting software:
Accounting systems have traditionally been on-premise, but there’s recently been a rise in the popularity of cloud-based solutions. That’s because they offer remote access and lower upfront costs. The benefit of an on-premise deployment, on the other hand, is that users won’t have to pay recurring fees for the software license.
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