I'm building a model for an insurance agency. Since they have no COGS, should I carve out "Commissions" from operating expenses and reclassify as COGS? Would I also carve out "Salaries & Wages" and "Insurance for Employees" expense?
Or should I simply take COGS out as a line item? (I'm pretty sure I shouldn't do this.)
Any help is appreciated. Thanks in advance.
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But don't insurance companies sell things? And doesn't it cost them to add coverage for someone?
Why would anyone buy insurance- or anything else- if the COGS is "free"?
Yeah, I think you just include commissions paid to insurance agents as "COGS".
So where do doctor's bills go on the income statement?
It's an insurance AGENCY so they don't cover any of those bills. It would be recorded on an actual insurer's income statement but not the agent that sells the policy for them.
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