---
title: Premium reconciliation
slug: finance-operations/premium-reconciliation
icon: {"lucideIcon":"ReceiptText"}
docTags: 
createdAt: 2026-08-17T11:16:09.900Z
---

## 🎯 Purpose

Monthly reconciliation of premium bank receipts against policy-level allocations in the policy administration system, and reconciliation of both positions against the general ledger.

**Process owner:** Finance Operations Manager
**Control deadline:** Closed by working day 6

## 📊 Operational overview

This reconciliation control validates completeness and accuracy of premium allocations, supports client-money governance obligations, and provides evidence that policy administration balances agree to financial records.

## 🧾 Working file and evidence

The reconciliation workbook template (structure below is illustrative sample data):

::google-sheets{url="https://docs.google.com/spreadsheets/d/1BxiMVs0XRA5nFMdKvBdBZjgmUUqptlbs74OgvE2upms/edit#gid=0"}

## ✅ Procedure

::::WorkflowBlock
:::WorkflowBlockItem
Extract the month's bank statements for all premium accounts, the allocation report from the policy administration system, and the GL premium control accounts.
:::

:::WorkflowBlockItem
Match bank receipts to allocations. Auto-matching handles referenced debit-order receipts; investigate unmatched remainder items manually in age order.
:::

:::WorkflowBlockItem
Classify every unmatched item as an unreferenced deposit, bounced collection pending reversal, intermediary bulk payment awaiting schedule, or timing difference.
:::

:::WorkflowBlockItem
Request intermediary bulk-payment schedules immediately where supporting allocation detail is outstanding.
:::

:::WorkflowBlockItem
Reconcile allocation totals to the GL premium control account. Raise journals only where a documented and approved cause exists.
:::

:::WorkflowBlockItem
Produce the reconciliation pack including matched percentage, aged unallocated items, open exceptions with owners and target dates, Finance Operations Manager sign-off, and Financial Controller review evidence.
:::
::::

:::hint{type="danger"}
**⚠️ Client-money control requirement**

Premium remaining unallocated represents a client-money exposure. "Plug" journals are prohibited. Every unreconciled difference must have a documented cause, evidence trail, and accountable owner.
:::

## ⚠️ Exception and escalation handling

:::hint{type="warning"}
**🛡 Escalation control**

Unallocated items older than 60 days require documented escalation with named ownership and remediation dates. Suspected intermediary misappropriation must be escalated to Compliance and the Head of Distribution on the same business day.
:::

## 📈 Measures and reporting

Matched-on-first-pass rate and aged-unallocated value feed the finance section of the monthly operations review pack.

:::ExpandableHeading
## 🔎 Operational guidance

- Retain source extracts, reconciliation workbooks, payment schedules, and approval evidence in the controlled records repository.
- Prioritise review of aged unmatched items to reduce client-money exposure and downstream commission impacts.
- Validate that all manual allocations and journals include preparer and reviewer traceability.
- Escalate recurring reconciliation exceptions through the monthly operations governance forum.
- Ensure all reconciliation evidence is audit-ready and reproducible without reliance on local spreadsheets or email histories.
:::