QUESTIONS FOR INTERVIEWING AGENCY ACCOUNTING OR CFO CANDIDATES
1. How do you recommend we book direct-bill commissions-on an as-received basis or by accrual? This question has three parts:
- What questions do you have?
- What other criteria do you weigh in coming to your answer?
- What will be the specific debits and credits involved in implementing your recommendation?
2. What revenue detail do you recommend we show on our internal income statement? That is, what specific revenue line items should we have in our chart of accounts?
3. What compensation-expense detail do you recommend we show on our internal income statement? What are the specific line items and subtotals?
4. If we were reviewing the duties and productivity of our commercial-lines CSRs, what input would you offer on the subject of whether and to what degree they should be involved in invoice creation, invoice processing, and collection?
5. When our public-accounting firm prepares statements from our internal reports, which items do you believe they should consolidate? (This method shows less detail than internal reports.) Why?
Also, do you believe the public accountants should be preparing a compilation, a review, an audit, or no statements at all other than tax returns?
6. Regarding agency-billed business:
- Procedurally-for control purposes-how do you believe we should handle binder-billed items? And what are the specific debits and credits?
- How should our balance sheet show funds collected before coverage-effective date?
- What accounts should we use to record items collected after the effective date but before the item appears on the carrier's premium statement (or account current)?
- What increments should we use on our receivables-aging report?
- From an accounting and control perspective, at what points should we send late notices or cancellation notices following the invoice date?
7. Should we be reconciling our direct-bill commission statements each month?
What are the cost and benefits of doing so?
8. For commission-based producers, do you recommend paying them directly from a commission report every pay period? Or do you recommend a draw with periodic reconciliation? If the latter, how often should we reconcile?
9. Should producers be made responsible for premiums in bad-debt situations?
10. What should be the main components of an agency's customer-credit policy?