ACG - Agency Consulting Group

The PIPELINE

A national monthly newsletter for agency principals dedicated to agency management topic

Definition of terms

DEFINITION OF TERMS

COMMISSION EXPENSES: Commissions or overrides paid to producers not employed by the agency

OUTSIDE SERVICES: Includes contract labor, motor vehicle reports, inspections

COST OF EMPLOYMENT: Included in this category are those items normally considered benefits (group programs). Also included in this category are payroll taxes and contributions to pension plan (Note: Education expenses, previously included in this category have now been assigned a separate line in the operating expenses)

EDUCATION: Includes training and seminars

# EMPLOYEES: Use average # of employees per year

OCCUPANCY: Rent and utilities and all building & ground maintenance

REVENUE PER EMPLOYEE: Divide total net revenue by the number of employees

PROFESSIONAL FEES: Legal, accounting, consulting

COMPENSATION PER: Divide total compensation by average number of employees

SPREAD: The difference between revenue per employee and compensation per employee