AGENCYBUDGET

well you have maintained your budget during the year.

Here is an overview of the sections in the tool:

#1: Components of the Income Statement

Income statements are split into two major sections: Revenues and Expenses

Revenues can be further categorized into Commissions & Fees, Contingency/Bonus, and Other Income:

Commissions & Fees: This category can include any revenue resulting directly from sales of insurance to Agency customers. This includes direct bill commissions, agency bill commissions, agency fee commissions, and any commissions received from insurance brokers. Only the agency’s portion of commissions and fees belong in this category Any revenue collected in an Agency Bill

Continued from page 28 situation that is to be remitted to a carrier should not appear on any part of the income statement because it is not owned by the Agency. This portion is collected and held in a Trust Account on the Balance sheet until it is remitted to the carrier.

When

budgeting for Commission and Fee

Revenue consider:

Expected renewal income. This should be based on last year’s performance, your agency’s retention rate, expected rate increases, and any other expected changes from carriers. Be sure to eliminate any polices that you know have been lost or by their nature are not expected to renew (for example bonds). New Business. Include the new business you expect in the coming year based on the goals that you have set for your team.