ACG - Agency Consulting Group

The PIPELINE

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

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