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... telephone/equipment rental/data processing/depreciation on fixed assets-Personnel factor. Insurance-Premium factor for E&O and personnel factor for office package with Group insurance and Workers Compensation handled as part of compensation costs. Legal fees-Allocate directly for specific purposes or use commission factor for general legal costs. Accountant fees-Commission factor for financial statement preparation and tax returns, billing factor in agencies using accounting firm for bookkeeping or batch processing. Taxes/licenses-Commission factor for general taxes and personnel factor for licenses, with payroll taxes being handled as part of compensation costs. Dues, subscriptions and contributions-Commission factor. Supplies/printing-Commission or account factor. Postage-Account factor. Outside services-Allocate directly or use commission or personnel factor, depending on which seems to be the most appropriate. Education-Allocate directly as compensation costs or use personnel factor ... enough to ask for them. Carriers that previously had been giving an extra five points on business taken from another company are now giving agencies an extra 15 points on their entire book. These extra commission dollars have gone a long way to offset the reduced income resulting from soft-market premium levels. But even the largest agencies have a finite amount of premium dollars to spread around. And constantly switching of accounts from company to company is expensive and sometimes not in the customer's best interest. Unless you can keep expenses at or near current levels, profitability will eventually start to erode. This scenario makes the budgeting process all the more painful. Growth has to come from actual new accounts, either produced internally or acquired from someone else. It's essential that the cost of putting these new accounts on the ...

... to build future value, rather than reaping short-term gains through bonuses or taking out as much profit as possible (as many owners have in the past) . Failure to reinvest in your agency will leave a hollow shell by rapidly decreasing the firm's value. The agency owner's role in most medium to large-size firms should be strategic, rather than focused on day-to-day tasks. The employee handling the accounting/bookkeeping will perform all necessary functions, including preparing reports for management. The accounting manager's job description should include a checklist of the tasks that they're expected to perform (see below for sample) . Base all management decisions on how they will impact the value of the firm. This type of focus will help you choose the direction that will ultimately lead to more money for retirement from either an internal ... Oak This content has not been rated yet. AGENCY FINANCIAL MANAGEMENT 101 by Bill Schoeffler and Catherine Oak Because most agency owners are former producers, they seldom have financial management expertise. This article focuses on the basic skills needed to keep your agency in good fiscal health. Introduction Owners who don't embrace financial management will tend to ignore the functions that they see as a burden or a necessary evil. Accounting and financial management in these agencies tend to suffer because of owner indifference, fear, and ignorance. Agencies have fewer dollars available today, owing to lower commissions a soft market, and increases in expenses. These pressures make financial management critical in order to provide the owners with the same personal income and value for their stock as in the past. All well-run agencies exhibit certain financial management characteristics ...

... ? You probably know the Return on Investment (ROI) on your last stock or mutual fund, but what about the ROI on your AMS? Does it really matter? Many agents don't know the answer to these questions; in many cases, they've never given it any thought. They dutifully bought a system because it was the right thing to do. Then they immediately turned it over to their bookkeeper or accounting department (since computers were for number crunchers') and blissfully went about the business of selling and servicing. Today, most agencies have a comprehensive automation system. They also have a high degree of automation knowledge, but are still not what you would call techies. For the most part, they have no idea if they're using their system to anywhere near its full capability. The ... Management System Utilization Survey that follows will allow you to measure your system usage and then take action to improve it. Although neither a complete survey of every possible function in every major agency management system, nor a measure of every type of software available to agents and brokers, the survey will open your eyes to forgotten uses of your AMS. Take the time now to print and complete this survey. Measuring your agency utilization is the first step toward improving it. The test can be completed in a few hours. Once you have completed and scored it, your strengths and weaknesses will be apparent. Several key people in your agency should complete their own copies of the survey, and then compare their answers to get an accurate overall picture. &# 160AGENCY MANAGEMENT SYSTEM UTILIZATION SURVEY DIRECTIONS: ...

... agency's financial management is inadequate, however, years may pass before the problems becomes evident-and it may be too late to fix them. Let's look back at the evolution of today's agency financial management. As you do this, think about your own agency and the role of your financial manager. Evolution of the Financial Manager In the not-so-distant past, an insurance agency's finances may have been managed by a bookkeeper sitting in a dark back office sweating over an account current ledger (wearing green eyeshades, of course) . Life was stressful for that bookkeeper because all the columns on his ledger had to balance, and much of his work had to be done manually. Before the advent of spreadsheets, financial projections or forecasts could be done, but this was slow and tedious. When agency automation was ... , it came with the automatic computation and printing of account currents and many other financial reports. The average agency had increased in size, and the financial manager might now be an accountant. Life was still stressful because he was most frequently responsible for the new computer system. He knew very little about computer software and hardware, but he was the logical choice for this responsibility, since anyone who understands debits and credits must understand computers-right? Need for Savvy Financial Management In recent years, the world of the insurance agency has changed dramatically, and the need for effective financial management has increased. Much of the accounting is done automatically by the computer, with the remainder handled by the accounting staff. The computer system is frequently managed by an Information Systems Manager. The financial manager may have responsibility ...

...ictment of capable, hardworking bookkeepers. But the fact remains that making ...

... owed to the agency without alienating the insured. In this section, we will answer the following questions: Who should do the collecting? What are the steps to developing an effective collection system? When should you collect? Why must every agency set a goal concerning collections? OVERVIEW Who Should Do the collecting? One staff person should be responsible for the collection system. This person should be the bookkeeper, financial manager, or another individual in the accounting department. Do not involve the producer in collecting unpaid premiums. A producer cannot be the good guy' who develops a friendly relationship with the insured and then the bad guy' at collection time. What Are the Steps to Developing an Effective Collection System? 1. Appoint a responsible collection manager. 2. Establish a list of key ... (the agency's largest and best accounts), which are not subject to automatic collection rules. These accounts receive special attention by telephone from the collection manager. 3. Establish an agreement with CSRs and anyone who processes new and renewal policies that a policy inception date cannot go by without a binder and a billing. 4. Proceed to get payment within 15 days of the renewal date, or issue a notice of cancellation directly to the insured (with the exception of previously agreed-upon key accounts) . Use either an automated aged-accounts receivable printout or your manual bookkeeping system. 5. Educate all producers, agency staff people, and insureds regarding the collection policy of the agency. 6. All existing past-due accounts must be called, then followed up by a letter that advises them to pay the ...

... from having to use the system to obtain policy information, prepare correspondence, and communicate with others inside and outside of the office. Another common mistake is to take the training process too lightly. Effective utilization of the system is a process, and making sure that everyone knows how to use the basic programs and the upgrades is an ongoing and often full-time job. Trying to get by with the bookkeeper as a part-time systems coordinator/trainer is tantamount to shooting yourself in the foot. Rather than running at full speed, the agency and its systems implementation process will merely limp along. A third common error is to plug the system into the existing set of manual procedures without taking the time to re-evaluate the way every single function is being handled. Automation has an impact on virtually every agency ... internal fax and E-mail capabilities finally started to gel this past year. Fully automated agencies are showing revenue-per-employee figures in excess of $125,000, and some are hitting more than $150,000. Although some agencies are having fantastic results with automation, a number of firms are still operating with sub-par productivity levels and often 10 or more extra people. A commercially-oriented agency with a large average account size should have revenues per employee of at least $125,000. Total revenues of $5 million, for example, would translate into a head count of 40 people. So an agency of this size with 50 employees is effectively overstaffed by 10. At an average compensation per employee of $60,119, the direct annual expense associated with these extra people is in excess of ...

... yet. COMMERCIAL INSURANCE AUDIT PROCEDURE In most agencies, audits are processed much like all other types of mail. Because of the adverse financial impact that an audit can have upon an agency, it is our opinion that a specialized processing take place. Unlike other company billings that are normally controlled by the CSR/Marketer, it is our feeling that the audits be under the direct supervision of the bookkeeper or financial manager. 1. All audits when, received by the Financial Manager/Bookkeeper are logged in on Form audit.frm 2. Financial Manager/Bookkeeper establishes a follow up date 5 days prior to the date that an audit can be returned to the company for direct collection. 3. Financial Manager/Bookkeeper notes on the agency copy of the audit the follow up date and forwards the ... efforts. Ability to attach leads and clients to your specific market searches, with e-mail alerts for all the market, articles, blogs and people searches you make. And much more! All Articles by CompleteMarkets Editor Monetization type: None Comments (0 ) There are no comments posted. Search Articles/Libraries Select a Category All Benefits & Financial Services Commercial Lines Insurance Careers Communications Customer Service Financial/Accounting General Articles Human Resources Legal and E&O Letters (Customer Service) Letters (Sales) Life/Financial Services Management Marketing Marketing Agency of the Month Organizational Profiles Personal Lines Planning Questions & Answers Risk Management Selling Specialty Lines Technology Uncategorized Choose a Content Package All Member Content IMMS Library Jack Burke LIG Marine Managers USG Insurance Services, Inc. NIF Group Inc. PRS High Hazard/High Risk ...

... 4. If notice is not received, follow up with company and resuspense for an additional 6 days. 5. When cancellation is received, review for correctness and note the effective date of cancellation on customer's electronic file. 6. If agency has requested cancellation for non payment of an agency billed premium, set a suspense date of 1 day prior to the effective date of cancellation to check with bookkeeping to determine if premium has been paid. 7. If the payment has been made, CSR/Marketer should notify company in writing and on the phone to reinstate the policy or coverage. 8. If policy is not to be reinstated, CSR/Marketer notes the cancelled status of the account in the customer's electronic file. 9. If the cancelled policy requires an audit, CSR/ ... x No Thanks Loading.. Work Flow Procedures Manual-Personal Cancellation Procedure 4/30/2013 by CompleteMarkets Editor This content has not been rated yet. PERSONAL INSURANCE CANCELLATION PROCEDURE There are three goals to the cancellation procedures. They are as follows: Determine the cause so that the agency can prevent future erosion of business Protect the agency from an E & O exposure caused by incorrect termination of coverage Regain the account on the next anniversary, if possible Most agencies plan, measure and record the sale of new business, but very few take the time to really control the loss of business to the agency. It is the opinion of our firm that no agency really profits if business keeps coming in the front door and going out the back. Next, it is important to realize that unless there is ...

...lient’s office. The bookkeepers can meet the client to answer ques...m to resources who can. Know which accountants, attorneys, and bankers can ans...