| In the past smaller insurance companies have | | | | Under an ERP system all data is compiled in a |
| done their accounting using traditional accounting | | | | centralized database. This leads to several |
| software like Sage or QuickBooks. These solutions | | | | advantages over traditional insurance accounting |
| work very well for the accounting side of things | | | | software: |
| after a few customization adjustments have been | | | | (1) The data is easier to keep safe and accurate. |
| made. However, now there may be more of a | | | | When important data or information is stored all |
| move towards a comprehensive solution. | | | | over the company there is a greater chance that |
| Insurance agencies need to track quite a bit of | | | | this data will be stolen or mishandled. Data stored |
| information; perhaps more than your normal | | | | in a centralized database behind firewalls that can |
| company. They need information on premium | | | | only be directly accessed by a database manager |
| payments, claims, and insurance rep commission | | | | is a lot safer than data stored on a sales |
| rates. Unfortunately not all of this information can | | | | representative's cell phone! |
| be tracked in a normal accounting package. | | | | (2) Redundant processes are avoided. Instead of |
| In the past this has meant that the insurance | | | | sales sending the information to accounting who |
| agents come and talk with accounting or | | | | then enters it into the system, the sales team |
| management when they need information on | | | | can directly enter sales data into the system. This |
| expense allotments or special sales offers. In | | | | leads to less chance of a data-entry error |
| addition accountants have had to communicate | | | | because only one person is entering one piece of |
| with agents before entering key accounting | | | | information instead of two people. |
| information such as sales or travel expenses. This | | | | (3) Better flow of communication. With a |
| leads to quite a bit of redundancy as well as time | | | | centralized data management system you can |
| lost, not to mention more of a chance for | | | | assign rights and privileges to individuals so that |
| data-entry errors. | | | | they can access information that is pertinent to |
| Insurance companies may want to look for a | | | | them. This means that sales can interface with |
| more comprehensive insurance accounting | | | | the database in order to see special offers and |
| software package. This type of thought process | | | | travel expenses. Accountants can interface with it |
| is known as enterprise resource planning (ERP). An | | | | to look at expenses and revenues and managers |
| ERP system approaches a business organization | | | | can access it to see important management |
| from more of an entity-wide look as opposed to | | | | information. |
| individual silos or modules. In the past accounting | | | | Insurance accounting software is important and it |
| was very separate from the sales team which | | | | may be time your agency thought about an |
| was very separate from management. Each of | | | | upgrade from traditional software to a more |
| these different modules in turn uses their own | | | | comprehensive solution. |
| software to manage information. | | | | |