What The Auditor Is Looking For
A workers' compensation policy is priced on estimated payroll and reconciled at year end against actual payroll. The audit is that reconciliation. It decides whether you get a refund or an additional premium bill, and the difference is often substantial.
- Gross payroll by employee for the policy period
- Wages split by classification code
- Overtime identified so it can be adjusted where allowed
- Officer and owner payroll, with any exclusions applied
- Subcontractor payments and their certificates of insurance
- Cash disbursement records supporting all of it
Where Premiums Get Overcharged
- Every employee lumped into the highest-rated class code
- Overtime reported at full value instead of the allowed portion
- A subcontractor without a certificate on file, so their payroll is charged to you
- Clerical and office staff misclassified as field labor
- Materials included in a subcontractor total that should have been split out
The last one catches construction businesses regularly. Where a subcontractor's invoice covers labor and materials, only the labor portion should carry into the audit, and only if the split is documented.
How Support Works
Records are prepared before the auditor arrives rather than gathered while they wait. Payroll is organized by class code from the register, subcontractor certificates are collected and matched to payments, and the questions that will be asked are answered in advance in writing.
After the audit, the worksheet is reviewed against the records before the resulting bill or refund is accepted, because errors on the auditor's side are common and are correctable while the file is still open.
Audit Support For Huntsville, AL Contractors And Employers
Construction, plumbing, moving, and other trade businesses across Huntsville, AL, Harvest, AL, and North Alabama use this most, since they carry the highest premiums and the most subcontractor activity.
Workers' Compensation Audit Support, Answered
When does the audit happen?
Shortly after the policy year ends. You will get notice from the carrier, and the more time between that notice and the audit, the better the outcome tends to be.
What if I do not have certificates for my subcontractors?
Then their payments are generally charged to your policy as if they were your employees, which is expensive. Collecting certificates before work begins is the fix, and it has to happen before the audit, not during it.
Can the audit result be disputed?
The worksheet can be reviewed and errors raised with the carrier while the file is open. Waiting until the bill arrives makes it harder.
What Usually Comes With It
Payroll Processing
Weekly, bi-weekly, semi-monthly, and monthly payroll, run through QuickBooks Payroll or Patriot with direct deposit, stubs, deductions, and the journal entries posted into the same period as the books.
Read moreConstruction Accounting
Job-level costing, retainage tracked apart from ordinary receivables, work in progress reported for jobs crossing a period end, change orders captured when approved, and subcontractor documentation collected before payment rather than at audit.
Read moreJob Costing
Labor, materials, subcontractors, and equipment coded to the job so each project carries its own profit and loss, with estimate-to-actual comparison that makes the next bid better and feeds the comp audit and bonding statements.
Read moreNot Sure Where This Fits?
Bring the situation as it actually is. We will work out what carries a deadline, what can be corrected, and what is already fine.