Track Commissions and Revenue

Learning Objectives

After completing this unit, you’ll be able to:

• Explain the importance of accurate commission and revenue calculations.
  
• Manage producer splits and roles with Insurance Brokerage.
  
• Process commissions statements and generate commissions for producers.
  
• Calculate expected revenue calculations for rate plans.
  

Processing Payments and Revenue

In the previous unit, you explored producer splits, the foundation of commission allocation. Whether commissions are assigned to individual producers or roles, properly structured splits ensure payouts are fair, accurate, and scalable. However, setting up splits is only one piece of the puzzle—brokerages also need to process commissions and forecast revenue.

For a brokerage, precise commission tracking underpins financial health. If commissions aren’t matched correctly to policies or if expected revenue isn’t forecasted properly, brokerages risk misallocated payments, discrepancies, and potential lost earnings. The challenge is matching carrier payments to policies and ensuring everyone gets the right amount.

This unit explores how Insurance Brokerage automates and simplifies these processes by enabling you to:

• Process commission statements, matching carrier payments to policies and producer splits.
  
• Calculate expected revenue, using commission schedules and rate plans to ensure accurate forecasting.
  
• Aggregate commission data across policies for a comprehensive financial overview.
  

With these tools, brokerages gain a clear view of finances, improve payment accuracy, and simplify revenue forecasting. This leads to efficient operations, and most importantly, financial stability.

The Commission Statement Model

Insurance brokerages typically manage commissions in one of two ways. With direct bill, carriers bill clients directly for insurance policies and then pay commissions to the brokerage. In contrast, with agency bill, the brokerage handles client billing, retains its commission, and remits the remaining premium to the carrier.

Currently, Insurance Brokerage offers a direct bill solution. This means processing commissions by matching carrier-provided payment details to policies and distributing commissions based on predefined splits. The flexible data model, configurable commission statements, and automated processes that come with Insurance Brokerage make for a seamless workflow.

The commission-processing workflow relies on a data model that supports a variety of commission statement structures.

This table describes some key objects.

Manage Commissions Statements

Let’s follow Julia at Cumulus Brokerage as she processes a commission statement for Sally’s Aviation in January.

Julia creates a new Commission Statement, entering carrier account details, statement date, accounting month, and payment amount.

Next, she uploads a CSV of carrier commission data, and the system maps the spreadsheet fields automatically.

After upload, the import wizard automatically maps the fields to the Commission Statement Line Item fields. If the CSV file contains any nonstandard fields, you can map them with just a few clicks.

Once the import process is complete, the line items display on the Commission Statement record. For January, there are four line items, one for each of the EB plan types.

At this stage, the line items show a status of Process Pending. It means the items aren’t yet matched to policies or processed for producer commission records.

Julia clicks Process to launch the Commission Statement Process Flow.

The flow automates these steps:

1. Match Policies uses predefined criteria (policy name, effective date) to match line items to the correct insurance policies and flag unmatched items.
   
2. Compute Producer Splits calculates commissions for producers based on the active split arrangements for the policy.
   
3. Create Producer Commission Records generates producer commission records for each producer.
   

The status of each line item updates to Processed when successfully matched and allocated; any issues are flagged for review.

For the January statement, all the line items process successfully!

Julia reviews the new producer commissions and sees the right ones shown based on the defined producer splits for that policy.

With commissions calculated, matched, and logged, the brokerage can confidently track revenue and producer payouts.

The Rate Plan Commission Model

Accurate revenue forecasting is critical for insurance brokerages. In the Direct Bill model, carriers compensate brokerages through commissions, so understanding the expected revenue for each policy helps identify discrepancies and improve financial planning.

Earlier, you explored rate plans, which represent the amounts carriers charge employers for coverage—often tiered (Employee Only, Employee + Family). Expected revenue builds on these rate plans by adding commission schedules, which define how commissions are calculated. Commission types available in Insurance Brokerage include:

• Flat Fee: a fixed dollar amount per policy or coverage
  
• Percentage of Premium: a set percentage of the total premium
  
• Graded Percentage: a tiered structure where the commission rate changes once premiums exceed certain thresholds
  
• Per Employee or Per Member: a fixed amount for each enrolled employee or individual covered
  

By combining rate plans and commission schedules, brokerages can estimate revenue at the policy and coverage levels with precision.

Here’s how the commission schedule fits into the rate plan data model.

Each rate plan can have one or more commission records.

Calculate Expected Revenue

For Sally’s medical coverage, Julia navigates to the Insurance Rate Plan and creates a Rate Plan Commission record.

She sets the Commission Type to Graded Percentage of Premium.

Next, she defines the graded percentage structure, specifying the appropriate premium percentage for each premium threshold.

Insurance Brokerage applies the defined percentages to the premium amounts in the rate plan, calculating the Expected Commission. The resulting values roll up to multiple levels.

• Insurance Rate Plan: Shows the calculated expected commission for that coverage’s rate plan.
  
• Insurance Policy Coverage: Aggregates results from each related rate plan to show total expected commission per coverage.
  
• Insurance Policy: Provides a consolidated view of expected commission across all coverages.
  

By layering commission schedules on top of rate plans, brokerages can easily manage forecasts and verify that actual commissions align with expectations. This multi-level aggregation streamlines financial planning and ensures transparency across the entire policy lifecycle.

Bringing It All Together

Nice work! You’ve successfully navigated the world of Insurance Brokerage for Financial Services Cloud. You’re now well-equipped to transform your insurance brokerage operations.

From deepening client relationships with personalized service and proactive engagement tools, to simplifying complex plan management and streamlining the entire policy lifecycle, Insurance Brokerage empowers you to work smarter, not harder. And with its robust revenue management features, you can ensure accurate commission tracking and forecasting, contributing to the financial health of your brokerage.

Ready to take the next step and put your newfound knowledge into action? Explore the resources to dive deeper into more ways to make Insurance Brokerage work for you.

Resources

• Salesforce Help: Commissions Management in Insurance Brokerage