How direct bill works
Under direct bill the carrier owns the billing relationship, including installments and non-payment. It pays the agency's commission on a statement, typically monthly, that lists each policy and transaction with its premium and commission.
How agency bill differs
Under agency bill the agency invoices the insured, collects premium into its trust account and remits it to the carrier net of commission. It controls the client's billing and holds the cash for a time, but carries the accounting work and credit risk.
The reconciliation problem
Direct bill moves the work to reconciliation: each commission statement must be matched to policies and expected commission in the agency management system, with unmatched items left in suspense. Formats differ by carrier, so agencies with many carriers spend a meaningful part of every month on it.
Where automation helps
Commission reconciliation suits automation because the inputs vary while the logic stays the same. The system matches each statement line to a policy and transaction, posts those within agreed tolerances and sends exceptions to accounting with the reason each failed.