Page 170 - The UnCaptive Agent

THREE ESSENTIAL FUNCTIONSOF YOUR AGENCY AND HOW TO STAFF THEM 143

make a little extra revenue for providing the service
(every two percent that you mark up, the rate will result
in .52 percent additional income to you on the premium
amount financed). The main advantage of premium
financing is that it removes the risk of premium col-
lection and payments from the agency.

If You Do it – Measure it

The last thing I’d like to point out about the accounting
function in your agency is that everything you do in
your agency should be measurable. If you can’t measure
it, you shouldn’t do it. The accounting system is one of
the places where you can track things, along with your
agency management system. You should establish key
performance indicators (KPIs) to manage and review
the progress of your business. KPIs are simply those
key statistics that you want to look at every month,
along with your financial statements, to tell you how
well your agency is doing. Some of the potential KPIs
you may want to consider monitoring are growth rate,
policy retention rate, closing ratios (by policy type,
carrier, client, and producer), mix of business by line of
business, policies per client, revenue per account, largest
current account, and so on. You should have goals for
all of these things, and you should monitor them on a
monthly—certainly no less than quarterly—basis.