Direct Bill vs. Agency Bill: What’s the Difference in Momentum AMS?

What Is Direct Bill?

With Direct Bill, the carrier or Managing General Agent (MGA) collects the premium directly from the insured. The agency’s primary responsibility is to track commissions, not to handle premium collection.

• No receivables or payables are created in the system

• The agency does not issue invoices

• Payments are made directly by the insured to the carrier

• If the insured pays the agency by mistake, it must be recorded as a Pass-Through Payment, meaning no revenue is recorded and the full amount is forwarded to the carrier

What Is Agency Bill?

With Agency Bill, the agency is responsible for billing the insured, collecting the premium, and then remitting the net amount (after commission) to the carrier or MGA.

• The agency issues invoices to the insured

• The system generates receivables and payables

• Commission is calculated and retained before remitting the balance

• The agency controls the payment cycle and is responsible for reconciliation

⚖️ Key Comparison Summary

Why It Matters

Selecting the correct billing type ensures:

• Accurate receivable/payable accounting

• Proper commission reporting

• Correct workflow for invoicing and collections

• Compliance with carrier billing expectations

⚠️ Once billing transactions have been created, the billing type cannot be changed unless all line items are removed first.

Related Articles

• ✅ Understanding Billing Types in Momentum AMS

• ✅ How to Record a Pass-Through Payment

• ✅ How to Generate a Billing Transaction and Invoice