2004 Best Practices Study
2004 BEST PRACTICES STUDY - APPENDIX
20. Telephone - Includes local & long distance, cellular telephone, and fax expenses. Excludes leased telephone equipment and maintenance expenses. 21. Postage - Includes postage, express mail, Federal Express, UPS, and courier expenses. Excludes postage meter lease/maintenance. 22. Supplies/Printing - Includes office supplies, copying, printing, and coffee/soft drinks/break room expenses. Excludes copying equipment lease/repair or copying machine depreciation expenses. 23. Dues/Subscriptions/Contributions - Includes professional dues, periodical and information services subscriptions, and contributions. Excludes social and country club dues. 24. Taxes/Licenses - Includes miscellaneous local and franchise taxes and license fees. Excludes property taxes, payroll taxes, and state and federal income taxes. 25. Insurance - Includes all property and casualty insurance, employee automobile insurance, as well as pay- ments for errors and omissions claims and/or settlements. Excludes "key man" life insurance and life insur- ance provided as a benefit to employees. 26. Professional Fees - Includes expenses for CPA's, lawyers, consultants and other outside advisors. Excludes directors' fees. 27. Equipment Rental/Maintenance - Total equipment rental and maintenance expense. Includes copier leasing/maintenance, telephone & fax machine leasing/maintenance, office furniture leasing/maintenance. Excludes computer equipment leasing/maintenance. 28. Bad Debts - Includes bad debts written off, claims paid. Any bad debt recovery income is netted against this expense item. Excludes payments for errors and omissions claims and/or settlements. 29. Outside Services - Includes telemarketing, MVR's, temporary help, bank fees, employment fees, moving expenses and all other outside services expenses. 30. Information Technology - IT expense. Includes computer hardware and software leasing, supplies, mainte- nance and maintenance contracts, training, and website development & maintenance. Excludes depreciation. 31. Education/Training - Total expense for all education and training for employees. Includes registration and materials expense, in-house training programs. Excludes computer-related training expenses. 32. Miscellaneous - All other miscellaneous operating expenses not included elsewhere. 33. Total Operating - The sum of items #19 through #32. 34. Amortization - Amortization of intangible assets. Includes purchased expirations (customer lists, renewals, etc.), restrictive covenants, goodwill and any other intangible assets. 35. Depreciation - Depreciation of tangible assets. Includes automobiles, buildings, furniture and fixtures, facility improvements and betterments, computers, office equipment. 36. Officer Life - Officer life insurance expense for which the agency is the beneficiary. Includes "key man" and agency officer life insurance premiums, net of any increase in cash value. Excludes life insurance provided as a benefit to officers or key employees. 37. Interest - Includes all interest expense incurred. 38. Other - All other miscellaneous administrative expenses. Includes directors' fees, overhead allocations to parent companies and deferred compensation. 39. Total Administration - The sum of items #34 through #38. 40. Total Expenses - The sum of the firm's total compensation, selling, operating and administrative expenses. 41. Pre-Tax Profit - Net revenues minus total expenses. 42. Pro Forma Profit - Management’s estimate of the agency’s profit if all “discretionary” expenditures made for the benefit of the owners, based solely on ownership, were removed and the goal of management was to maximize profits. 43. Operating Pre-Tax Profit - Pre-tax profit minus contingents, bonus and investment income. 44. Pro Forma EBITDA - Earnings Before Interest, Taxes, Depreciation and Amortization.
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