Every wonder what the KW model means and what agents should/shouldn't be billed for?
Below we have outlined some criteria/guidelines for you. You want to bill your agents for as little as possible. Since you are required to keep a $0 balance in your AR account, the more items you can make "Cash and Carry" the easier your job will be and the better it is for the agents.
Examples of some items that must be billed for are:
- Office rent
- Associate Tech Fees
- Commercial Fees (if an associate is a commercial member on the monthly payment plan)
- E&O (if you do not bill per transaction)
- MLS Fees (if necessary in your area)
- KW magazine (if you have one)
- Late Fees if necessary
- Annual renewal agent fees
Examples of items for “Cash and Carry” (items you should have your agents pay for directly at the time of purchase) are:
- Long distance (each agent should have their own calling card)
- New agent fees
- Office supplies
As Gary Keller says, “start with the end result in mind.” Remember it is much harder to do a take away from agents -- so don’t do something for them now that you will not be able to do when you have 150 to 500 agents in your market center.
With that in mind, remember the more items you bill for the higher your A/R balance is and the more collections you will have; not to mention the time it is going to take you to do this billing. We are moving toward 700 agent market centers, and if you are billing your agents for 38+ items you will need to hire someone just for billing. This is not a good use of resources and money.
While we are on this subject, it is important for you to understand what agent billing items are offset to expense and what are coded to Other Income. If the amount billed to the agent is exactly what the MC paid to the vendor offset the expense account. However, if the amount billed to the agent is an arbitrary amount i.e. copies at 7 cents each offset to an Other Income account.