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Published on September 1, 2022

Reports that link Profit & Loss reports to Agent Productivity

Agents are the source of all income for a brokerage... and agents are the source of all an offices expenses.  

To attract agents, brokers create nice offices, hire staff and build great services - which cost alot of money.  So it is critical to know how much each agent costs your operation.  To increase your brokerage's profitability there is a you need to constantly adjust the balance between spending to attract agents - and the need for profitability. So to navigate the balancing act - what you really need are reports that contain both your income per agent and your office overhead.

Reports that combine agent production with Profit and Loss  

... uncover the relationship between agent productivity and the brokerage profitability

Profitability per agent 
    It costs a certain amount of money to run a Brokerage.  Those costs have to be paid entirely by the Broker/Owner's share on the commissions closed.  Since your accounting system knows how much money it costs to operate, it is possible to see if the earnings from each agent are enough to cover the costs associate with each agent

Dependency risk 
    What if you have too few agents earning most of the money for an office.  This can make the Brokerage at risk for becoming unprofitable by losing just a few agents. In this example, 22% of the monthly overhead is being paid by 9 out of the 80 agents that work in the office. And each agents only represents a maximum of 3% of Overhead.  So that's a balanced office.

CMOE - Current Month Overhead Expense analysis 
    Current Month Overhead Expense analysis.  Over time, each office establishes a baseline for how much it costs to "have the doors open".  When you analyze the transactions that are pending to close, you can see how many months into the future will our operating costs be covered - based on the transactions that are currently pending to close  

Multi factor performance to Budget
    the Profit and Loss is a key performance indicator. Often a firm will setup a budget and compare their Profit to their Budget.  But there are lots of other key performance indicators that don’t show up on a Profit and Loss report. darwin.Cloud lets you see all your KPI compared to budget or goals - all on one report. 

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