Norm Goodman here on premium audit preparation…
Every employer should prepare for the annual payroll audit; this crucial activity cannot be left to chance. We suggest the following steps be taken to prepare for the audit:
- First, ask your agent or broker to explain the process. Ask him/her what some key questions or inquiries would be. If the answer does not sound right, or the broker does not sound knowledgeable, dig deeper.
- Remember, you should play an active role in setting the premiums. Your greatest chance of paying the absolute lowest premium is determined by how well you prepare for the payroll audit.
- Determine what information to show the payroll auditor. Learn how to counter your insurance carrier’s “aggressive auditing.”
- Always remember that, to the insurance company, premium auditing is a profit center.
- Hire an experienced auditor to help you prepare. He/she can tell advise you about what materials to gather.
- Obtain your own copy of the NCCI’s SCOPES Manual of classifications. Make sure that the definition of the classifications on your policy describe your business.
- Check your experience mod. Have it recalculated by an expert in the field.
We appreciate Zapcomp providing this helpful checklist for how to prepare for a payroll audit. If you have questions about this complex matter, write in the comments box below for Norm. www.zapcomp.com
