Perfect Together: Insurance and Accounting Records

The right integrated databases can be a valuable practice tool.

irtually all accounting firms have a client recordkeeping system; sometimes the system is part of the firms’ income-tax-preparation software package or it may be a stand-alone program. Few of the databases most CPA firms already have in place provide the level of detail and flexibility an insurance practice needs. Insurance-specific client management systems typically are more comprehensive and service oriented. When a CPA firm integrates its existing client records with an insurance-based system, the overall level of client service will increase due to the depth and breadth of information available, the sorting capabilities and the ease of access.

A good integrated recordkeeping system can provide a permanent resource that enables a firm’s CPAs and insurance professionals to easily locate critical client financial records. By using such a system a CPA can, for example, identify clients who would benefit from an insurance strategy suggested by a particular tax law change. The robust new system that evolves from integrating a firm’s client database with an insurance-specific client management system is a useful tool that can help make a CPA firm the focal point for all of a client’s financial services and information needs.


Insurance records are detailed and voluminous. They require virtually immediate accessibility and—unlike accounting records—must be kept forever. An insurance recordkeeping system’s primary function is to track insurance transactions. Its secondary use is to easily gather, organize and present client financial data in real time for easy use by CPAs and insurance staff. These characteristics make integrating a firm’s two databases that much more useful.

Here’s how a standard insurance database can transform the client service resources of most accounting practices: It performs tasks such as referencing and cross-referencing client names against selected search criteria, provides contact information, identifies other professionals the client works with and accesses demographic information. For example, if a new policy strategy is best suited for small-business owners approaching retirement, pushing one button on the keyboard generates a list of the clients who would benefit from this idea.

The insurance industry mostly keeps its records on Web-based systems. Integrating insurance and general client databases on the Web allows accounting firms with geographically distributed offices to use standard software and to share files easily. An additional benefit is that insurance recordkeeping systems permit users to insert client history records and follow-up data. These systems have ample user-designated fields to track additional items that are important to accountants. For more information on insurance databases, see the box below.

Recordkeeping Systems

CPA firms can choose from several excellent insurance-oriented client management systems that will easily integrate with the firm’s accounting practice. Depending on the flexibility and depth of data a firm requires for its accounting clients, it should check out these insurance system providers:

E-Z Data Inc., Pasadena, California, .

SunGard Insurance Systems, Miami, .

In addition, these two companies have general contact and relationship management software programs with add-on utilities for the financial services community:

ACT!, Scottsdale, Arizona,

Goldmine, Colorado Springs, Colorado, .


Once an insurance recordkeeping system is in place and has begun sharing data with the firm’s accounting records system, CPAs will see a number of benefits from the integrated system’s data access and sorting capabilities.

Cross-referencing capability. This is the most powerful new client service benefit. When used practicewide, cross-referencing can help all of a firm’s clients by matching particular issues with specific client needs and vice versa. For example, a change in tax rules, such as the recent change in split-dollar insurance rules, can affect the underlying estate planning strategy of a client who has a split-dollar program. The database also has the ability to pick out specific bits of information common to individuals in the entire client pool. That means, for example, if a particular insurance company encounters a problem, the system can identify all clients who own that company’s policies, enabling the firm to recommend a specific course of action to affected individuals.

Few existing recordkeeping systems at CPA firms are able to sort clients by age, net worth, number of dependents, annual gifts, gift tax returns, generation-skipping transfers, family foundations or other tax- or investment-related issues that might require a CPA firm to send a reminder. Yet most insurance systems can do this easily. For example, how many clients made gifts this year and need to file gift tax returns? A convenient strategy for client follow-up meetings is to cross-reference clients within a set geographic area. CPAs seeing one client may as well arrange to see several others within the immediate area on the same trip.

Client contact information. An insurance-oriented client management system is geared to information searching, cross-referencing and cross-selling of services. When integrated with a firm’s existing accounting client database, the data retrieval and access benefits multiply.

The basic information an integrated system uses begins with the usual vital statistics such as age or marital status. It expands to include key professional relationships such as attorneys, bankers and other advisers. Add the names of the trustees of the client’s estate, beneficiaries of insurance policies and the like. Always include the person and firm who referred the client. This allows you to identify conflicts of interest with other professionals when bringing someone else in to advise the client on an issue.


Insurance-oriented client management systems contain certain standard information that integrates with a client’s overall financial picture. Some of this basic insurance information includes the policy number and issuing insurance company for each policy a client has. Firms can use the database to clearly identify the policy type and its intended purpose as well as record the base coverage and additional insurance or term coverage. It’s a good idea to include a scanned copy of the plan and all riders such as double indemnity and disability waiver of premium and identify any waivers such as flying exclusions. Firms should train noninsurance personnel in how to use this information when doing retirement or estate planning for a client.

Policy beneficiaries are another important part of every insurance client record. Most accounting databases don’t contain this information, but an integrated system would include current contact information for each beneficiary named on a client’s policy. Insurance records would also have the dollar amount of the death benefits the policy will pay each beneficiary. When a client dies, this is often critical information CPAs can use to advise the client’s heirs.

Underwriting records. Insurance systems maintain records of any preexisting conditions a client may have. The right system lets you track conditions that may cause a change in premium—smoking or cancer, for instance. You can also cross-reference these to a follow-up calendar. For example, a client with breast cancer who has been in remission for two years may be eligible for reappraisal of her health condition and a reduced premium. But that won’t happen without asking the insurance company for it. An integrated recordkeeping system reminds you to do so.


Few accounting-related databases offer the ability to record detailed client contact information; insurance-specific client relationship management systems do. They allow you to record, index and cross-reference all client communications such as telephone conversations, written correspondence (e-mail as well as regular mail) and attachments (such as marketing pieces and insurance illustrations), faxes and face-to-face meetings. This information is necessary to comply with rigorous insurance and securities practices standards. Moreover, such detailed records enable CPA firms to raise the overall level of client service by providing a complete historical record when someone else in the firm begins working with the client. This allows for a seamless transition of personnel.

Follow-up records. These records are the best client service tools in an insurance practice as well as for the rest of the firm. CPAs can include in the follow-up database things such as a reminder to schedule annual client reviews and record for automatic follow-up critical policy payment dates, gift dates or other important dates which, if missed, would devastate the client’s overall financial planning strategy. The system should also remind staff of important tax filing dates for insurance policies held in trust as well as any noninsurance filing dates other than the easily remembered April 15.


The enormous amount of information generated by an insurance practice will become an increasingly valuable asset for the affiliated CPA firm. Firms will learn new and more powerful uses for this information in managing their practices and serving their clients. Information in the database could, for example, suggest an accounting or consulting engagement the client may need. With a powerful database at their fingertips, CPAs can seek to become the primary provider of all their client’s financial needs.

Neil Alexander, CFP, is founder and president of Alexander Capital Consulting, LLC, in Los Angeles. His e-mail address is .


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