In IAR, Net Remittance is calculated by subtracting what from Net Cash?

In IAR, Net Remittance is calculated by subtracting what from Net Cash?

• A. Net Remittance equals Net Cash minus total commissions
• B. Net Remittance equals Net Cash plus total commissions
• C. Net Remittance equals total cash minus commissions
• D. Net Remittance equals Net Cash minus taxes

Answer: (B)

In this IAR calculation, you determine Net Remittance by taking Net Cash and adding total commissions. The thinking is that the commissions earned on ticket sales are part of what flows through as remittance, so they increase the amount that moves to the carrier. Net Cash represents the cash on hand from transactions, and the commissions are revenue earned by the agency on those same transactions; combining them gives the full remittance amount that is sent through. Subtracting commissions would reduce remittance, which isn’t how the IAR figure is built, and including taxes isn’t part of this particular calculation.

In this IAR calculation, you determine Net Remittance by taking Net Cash and adding total commissions. The thinking is that the commissions earned on ticket sales are part of what flows through as remittance, so they increase the amount that moves to the carrier. Net Cash represents the cash on hand from transactions, and the commissions are revenue earned by the agency on those same transactions; combining them gives the full remittance amount that is sent through. Subtracting commissions would reduce remittance, which isn’t how the IAR figure is built, and including taxes isn’t part of this particular calculation.