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...ake business decisions, from filing tax returns to selling the interest in the...Have some been structured to be income tax free (insurance payments may be)? ...

...me statements, balance sheets, and tax returns. Buyers will look at top-line ...potential buyers. THE BOTTOM LINE Preparation is essential to maximizing the...

...OP), which incorporated a number of tax incentives to encourage its use. The E...of principal and interest on the loan. Tax changes in 1997 now allow ESOPs and other tax-exempt organizations to be sharehol...

...ments for any agency, valuation and tax issues, shareholder internal buy/sell ... cash flow, terms affect both risk and taxes for both sides.   Win/Win N...

... after expiration, a company auditor will come to your office, or you will receive a request in the mail for a self-audit. The purpose is to determine the actual exposure units' upon which your final premium will be based. The following are suggestions that should lessen the possibility of being overcharged for insurances. 1. Some premiums are based on annual sales or receipts. Be sure the sales tax that you remit separately is not included in the gross sales figure. Also remember that the intercompany sales (involving subsidiaries and parent companies) are excluded. 2. If your General Liability premium is based on payroll, it is possible that you may omit your truck drivers' wages. Discuss this with the auditor, or call us if you have any questions. 3. When auditing General ... Blog Photos Group Connections Reviews IMMS Library Immerse yourself in our stacks. Take some time and browse through our library. We have thousands of articles, checklists, tip sheets, sales letters, and more! Communications Marketing Customer Service Planning Finance/Accounting Risk Management Human Resources Selling Legal and E&O Technology Life/Financial Services Glossaries Management Resources & Links Categories Popular Recent All Back Audit Explanation - Prepare, Prepare 4/30/2013 10:38:26 PM by CompleteMarkets Editor This content has not been rated yet. AUDIT EXPLANATION - PREPARE, PREPARE Dear (Customer Name), THERE'S SOMETHING YOU SHOULD KNOW ABOUT AUDITS . . . As you know, Workers Compensation and General Liability policies are subject to an annual audit by insurance companies. Within 60 days after expiration, a company ...

... . An LPT program involves past claims, but not future claims, as with a traditional insurance program. The main steps in an LPT are the claims review; actuarial analysis; and accounting for the transferred portfolio. The transaction involves the portfolio value of the liabilities, which is discounted to net present value; the investment value of risk capital; and issues such as administration, accounting, and taxes. SELLER'S ADVANTAGES: Eliminating uncertainty over the cost of losses, pay-out patterns, and interest-rate risks, including unreported losses. Reducing administrative duties. Eliminating accumulated collateral. Freeing up escrow funds used for claims handling from the TPA or the carrier. Seeing a positive effect on the balance sheet. Getting an accelerated tax benefit. SELLER'S DISADVANTAGES: Immediately paying the claim reserves' net-present value may reduce ... so you'll need this information for comparison. Compare your estimate of the portfolio's worth to your financials. If the price isn't lower than what's on your books, you'll have to justify the deal to your management or show the advantages or disadvantages of a particular accounting method for these losses, including tax implications. Once you have this key benchmark, you can determine the appropriate areas for proposals. Be prepared to identify your program's retention levels, aggregates, insurance and attachment points, and collateral by period. Review all of the components and assumptions in the proposals, and compare them to your own analysis. Question any assumptions you can't rationalize or components that don't apply, especially if they could have a negative effect on the transfer. Also be sure to evaluate the other party thoroughly: What's their ...

... to you, the ability of a bank to provide such services should be discussed before you make any changes. The strongest banking relationships will encompass all of these services, as well as add a good business advisor to your network. HISTORICAL FINANCIAL INFORMATION Be prepared to present and explain the financial history of your agency. Prospective bankers will frequently request up to three years' historical financial statements and income tax returns, in addition to current-year interim financial statements. This information will summarize your agency's financial performance. You should also be ready to explain annual fluctuations in your revenues and expenses. Customer base, competitive insurance company rates, and changes within your sales staff may all affect your commissions revenue. Changes from agency-bill to direct-bill insurance contracts might affect your level of investment income. Similarly, your operating ... Employees Articles Blog Photos Group Connections Reviews IMMS Library Immerse yourself in our stacks. Take some time and browse through our library. We have thousands of articles, checklists, tip sheets, sales letters, and more! Communications Marketing Customer Service Planning Finance/Accounting Risk Management Human Resources Selling Legal and E&O Technology Life/Financial Services Glossaries Management Resources & Links Categories Popular Recent All Back Be Prepared When Changing Banking Partners 4/30/2013 10:43:49 PM by CompleteMarkets Editor , Ron Overson This content has not been rated yet. BE PREPARED WHEN CHANGING BANKING PARTNERS by Ron Overson Business banking relationships tend to be personal and long-term; they rarely change. However, as your agency grows, its needs change, and you may be faced with the challenge-or opportunity-of finding a ...

... willing to finance the purchase of their interests? Does third-party financing make sense, and have you arranged for it well in advance? What financial resources does the next generation of owners have? Do you plan to use the agency's future cash flows to repurchase stock from departing shareholders? If so, have cash flow projections been prepared that validate the viability of this plan? The transfer mechanism and resulting tax consequences to buyers and sellers. As they say, The devil's in the details. Getting the price right is only half the battle. The structure of the deal must also support the objectives of the involved parties. Careful consideration must be given to the mechanics of the ownership transfer so that the tax liabilities can be minimized for both buyer and seller. A transfer of ownership can be structured in ... . Do you have a written plan in place to transfer the ownership of your agency in an orderly fashion and at a reasonable price when you decide to move on? If not, your likelihood of perpetuation success is greatly reduced. For many agency owners, their insurance agencies are their largest single asset-so it's surprising that they don't give more attention to protecting and maximizing this investment. If not properly prepared for, the transfer of ownership can be frustrating and disappointing. Unless options and objectives are evaluated well in advance (we recommend beginning perpetuation planning at least five to seven years before the actual transfer), you probably won't be able to accomplish all your desired objectives, and the departing owner(s ) will be disappointed with the results. Simply put, if you wait until the last ...

... evident until many years have passed. A little planning up front can help avoid disaster down the road. Here are a few tips to help agencies achieve better results from their accountant: The first step is to decide what you want your accountant to do. Many agency owners think their accountant is reviewing their financials every year when in reality, they're just taking the information and putting it on the tax return. I've had many accountants tell me, I have no idea what the numbers on an agency's income statement or balance sheet mean. I'm just taking the data provided by the agency and putting it in the right box. Iv'e even had accountants tell me that they knew the agency's numbers were wrong and that questionable practices existed, but their job wasn't to audit the books. Meanwhile, most ... as good with such general business advice as mergers/acquisitions, retirement, and benefits planning. Many agency owners attempt to kill two birds with one stone by asking their accountant to advise them on other issues. Unfortunately, these owners usually learn the hard way that these issues are best handled by advisors with specific expertise. The agency accountant is an important cog in your agency machine. A little preparation and ongoing communication can prevent your financials from turning into alphanumeric soup. Chris Burand can be reached at Burand & Associates, LLC, PMB 345, 1829 S. Pueblo Blvd., Pueblo, CO 81005, (719) 485-3868, fax (719) 485-3895, e-mail [email protected] , or Web site www.burand-associates.com . Login or Register (for FREE) to gain access to thousands ...

...ales or receipts. Be sure the sales tax that you remit separately is not incl...