Inside the invisible cost every MGA and carrier finance team is paying — and how Functional Finance eliminates it.
We recently conducted a deep-dive diagnostic with a former MGA operator who now works in venture. Before investing in billing and payments companies, he’d lived the grind himself, closing the books each month on programs that ran payments through Stripe.
He recorded a walkthrough for us: how he pulled reports, reconciled balances, and prepared the monthly bordereaux for capacity providers. What he showed was both familiar and staggering.
From the outside, it looked modern. Stripe handled collections, a policy administration system (PAS) tracked policies, and QuickBooks closed the books. But beneath that surface was a maze of spreadsheets, manual tie-outs, and late-night detective work that consumed every month-end.
“It looks like automation until you start reconciling.”
His process began with Stripe. Each month, he’d export every payment, refund, and reversal tied to active policies. Stripe’s data was rich in transaction details, (amounts, fees, timestamps), but had no policy context. “Stripe knows a payment happened,” he explained. “It doesn’t know what policy it belongs to or whether that premium was earned or still due.”
He’d then log into the PAS to extract policy-level billing data: invoices, written premium, cancellations, and endorsements. That gave him the earned side of the equation, (what coverage had been delivered), but not the collected side of what had actually been paid.
The job became an exercise in data surgery.
“I’d take Stripe data and dump it into Excel. Then I’d pivot by program, cross-check against the PAS billing files, and try to make sure control totals lined up. If they didn’t, I had to chase down the deltas manually.”
Each reconciliation step introduced new complexity. Chargebacks. Refunds. Partial installments. “Anytime we had a midterm change, it created two or three new rows I had to map by hand,” he said.
He also had to produce monthly bordereaux — paid and written — for each capacity provider. That meant aggregating transactions by program, validating totals against prior months, and often adjusting for late payments or cancellations that landed in the wrong reporting period.
“I’d pull a paid bordereaux from the PAS, compare it to Stripe settlement data, and inevitably find a mismatch. Sometimes it was a timing issue, sometimes a data export glitch. Either way, it was always on us to reconcile.”
When the numbers finally tied out, he booked summarized journal entries to the GL. The detail stayed buried in the PAS and spreadsheets. “The general ledger got the monthly rollup. But if you ever wanted to drill back down, good luck.”
And then it started again the next month.
That walkthrough revealed the root problem: Stripe and policy systems live on opposite sides of the financial brain.
Everything in between, the link between earned and collected, becomes manual middleware.
This gap is the reason so many MGAs, carriers, and program administrators rely on spreadsheets to make sense of their own books. Policy data, payment data, and accounting data were never meant to coexist. Yet every month, finance teams stitch them together by hand.
It’s both tedious and fragile. Each reconciliation is a single point of failure. One formula off, one missed refund, one timing difference that ripples across reports.
When you scale to multiple programs, capacity providers, or fronting carriers, that fragility multiplies.
Every MGA that operates this way pays the price in the hours and hidden risk absorbed by their finance team. It’s the invisible month-end tax.
Let’s quantify it.
That’s the month-end tax: the compounded cost of reconciling systems that were never built to talk to each other.
The tax doesn’t just show up on the P&L. It shows up in opportunity cost.
Every day spent on reconciliation is a day not spent on growth: launching a new program, onboarding a new broker, or reporting performance to investors with confidence. Manual reconciliation constrains scale.
And because the underlying systems are disconnected, even the best teams can’t see real-time collected vs. earned positions.
You can’t answer questions like, How much premium have we actually collected this week? or What do we owe our carrier right now? without opening five spreadsheets.
This is where operational drag quietly becomes strategic risk.
Carriers and capacity providers judge programs on data quality. Slow or inaccurate bordereaux erode trust. Inconsistent accounting delays audits. And any perception of weak controls raises red flags in renewal discussions.
Stripe wasn’t designed to carry that weight. It was built for simple, high-volume transactions. Not the nuanced, trust-based settlement model that defines insurance finance.
Functional Finance was built to close this exact gap. The one between earned premium tracked by the PAS and collected premium processed by payment systems.
Here’s how each pain point in that walkthrough disappears inside Functional Finance.
With Stripe + Spreadsheets: Export CSVs from Stripe; manually normalize formats for each program.
With Functional Finance: It ingests Stripe and any processor data automatically, normalizing fields and tagging transactions to the right policy and program.
With Stripe + Spreadsheets: Match Stripe settlements to PAS billing data manually; handle timing differences and reversals in Excel.
With Functional Finance: It reconciles collected payments against policy-level invoices in real time, accounting for reversals, chargebacks, and cancellations automatically.
With Stripe + Spreadsheets: Logged manually; easily missed or double-counted.
With Functional Finance: Captured and applied automatically to policy records and collection schedules.
With Stripe + Spreadsheets: Manually summarized; loss of detail and audit trail.
With Functional Finance: It generates GL-ready, policy-aware journal entries with full subledger detail.
With Stripe + Spreadsheets: Built manually from multiple exports; risk of mismatch.
With Functional Finance: FF produces continuous, automated bordereaux and partner payables based on reconciled collected data.
With Stripe + Spreadsheets: Disconnected views of cash, earned/unearned, and partner payables.
With Functional Finance: Unified financial dashboard showing collected positions, policy-level reconciliation, and upcoming remittances.
With Functional Finance in place, the same month-end that once required a week of spreadsheet gymnastics becomes a continuous, automated process.
Instead of exporting and reconciling, finance teams review exceptions. Instead of manually booking summaries, they post system-generated entries. Instead of explaining delays to partners, they send real-time, reconciled reports.
When billing, payments, and reconciliation are connected in one infrastructure layer, the month-end close stops being a cliff. It becomes a rolling process, always current, always auditable.
That’s the foundation of modern insurance finance:
The operator who shared his process summarized it best:
“Stripe made it easy to collect money. Functional Finance would’ve made it easy to account for it.”
Across MGAs, wholesalers, and carriers, the finance back office is entering its first real upgrade cycle in decades. Policy administration systems and general ledgers define the edges, but everything between them — billing, payments, reconciliation — has been left to spreadsheets and best guesses.
That “middle layer” is where growth slows, capital stalls, and trust erodes.
As distribution expands and programs multiply, that layer has become the bottleneck. Modern MGAs can’t afford to carry a manual month-end process burden. And payment processors alone can’t solve it, because insurance finance isn’t just about processing payments. It’s about connecting earned and collected data with confidence.
Functional Finance was purpose-built for that middle: connecting the systems that move money with the systems that govern it. It turns reconciliation from a manual process into an automated control.
The takeaway from our diagnostic is simple. If your month-end still depends on Stripe exports and Excel tie-outs, you’re not operating in real time. And the longer that lag persists, the more it costs.
The upgrade path doesn’t have to be disruptive. You can start by automating the ingestion and reconciliation of Stripe data today, then expand into full billing and partner payables as you grow. The ROI shows up quickly in faster close times, cleaner audits, and stronger partner confidence.
For the MGAs, carriers, and programs still living this story every month, the question isn’t whether automation is coming. It’s whether you’ll keep paying the month-end tax while you wait.
Talk with us about turning Stripe data into GL-ready, policy-aware entries.
Ready to replace tedious tasks with fast, accurate workflows? Book a free live demo of the #1 insurance financial operations platform today.
Functional FInance is a financial technology company, not a bank or FDIC-insured depository institution. Banking services are provided by Grasshopper Bank, N.A.; Member FDIC. The FDIC's deposit insurance coverage only protects against the failure of an FDIC-insured bank.