One balance the P&L never shows
The first number we check in a brokerage's books is the trust position: client premiums held, less net premiums owed to insurers, less earned commission you are entitled to withdraw. RIBO requires premium funds to be held in trust and reconciled every month, and the reconciliation has to tie three records together: the trust bank statement, the client and insurer ledgers in your broker management system, and the general ledger. When they disagree, the gap is either a bookkeeping error or a shortfall, and RIBO does not treat a shortfall as a rounding problem.
So we build brokerage books trust-first. The operating account can run a few days behind after a busy renewal week. The trust account cannot.
Agency bill and direct bill need different ledgers
How the premium travels decides what the books must capture, and almost every brokerage runs both models at once:
| Question | Agency bill | Direct bill |
|---|---|---|
| Who invoices the client | You do, through the BMS | The insurer does |
| Where the premium lands | Your trust account | The insurer's account |
| What moves next | Net premium remitted to the insurer on its statement | Commission paid to you on a monthly statement |
| When commission reaches operating cash | After the premium is collected and the commission is earned | When the insurer's statement is verified and booked |
| What usually goes wrong | Unmatched client credits and trust shortfalls | Missed or misapplied commissions on statements |
A bank feed alone cannot carry this. The general ledger has to mirror the BMS, whether that is Applied Epic or Power Broker, with the BMS acting as the subledger for client and insurer balances. We reconcile insurer statements against the commission the BMS says you earned, not against whatever happened to arrive.
The monthly close RIBO expects
Our month-end for a brokerage runs a fixed sequence: reconcile the trust bank account, age the client receivables including any premiums a client has financed, confirm the payables to each insurer, then post the documented transfer of earned commission to operating. Twelve clean versions of that close make RIBO's annual filing an afternoon; rebuilding them from bank statements in the filing month makes it a project.
That annual return asks you to report on the brokerage's financial position, including the trust account, and depending on how your firm handles premium funds it can call for a report from a public accountant. When it does, our Compilation and Review Engagement work sits on top of books we already trust, because we closed them ourselves all year.
Payroll and producers under the same roof
Brokerage payroll is rarely just salaries. CSRs and salaried producers run through source deductions and T4s, while commissioned producers often draw against future splits, which means someone has to reconcile draws paid against commission actually earned each month. We run that reconciliation inside End-to-End Accounting, so the producer statement, the payroll register and the general ledger all say the same thing.
One cost note that surprises new owners: because arranging insurance is exempt from HST, the brokerage claims no input tax credits, so we book vendor invoices at their full cost including the 13%. The tax consequences of that reality get their own treatment in our tax pages; in the books it simply means your true overhead is the gross number.
What you see each month
We work with brokerages across Mississauga and the GTA, and the monthly package is built for an owner who sells all day and reads statements at night:
- Trust position, reconciled and signed off, with any aged client balances flagged.
- Revenue by stream: agency bill, direct bill, and fees, so growth is visible by line.
- Producer summary: draws, earned splits, and the difference.
- Margin before contingent income, because profit commissions are declared by insurers on their schedule, and we book them when they are determinable, never before.
Bookkeeping, payroll, reporting and the corporate filing arrive as one engagement with one CPA firm, quoted in writing after a free 15-minute discovery call.
