The idea of audits of any kind may strike fear into business owners but this needn’t be the case. As long as you maintain accurate records and have the required information to hand, you shouldn’t experience any major difficulties. In this respect, there is no real difference between the types of audit you may experience – from a financial audit to workers compensation audits.
Workers’ compensation audits can be a little different inasmuch as they are used to establish what level of coverage your business needs to have and to establish a rating. You need to be able to provide the auditors with information about how many people you employ, the work they do, what they are paid, and also, whether there is work for your business that you outsource to contractors.
It really is just a matter of accurate record keeping and being upfront about your staffing. Workers compensation audits are a necessary part of establishing your level of coverage. In any case, there’s not a lot of point in withholding or misrepresenting the facts, as it can impact on your coverage. Being underinsured is financially risky and paying for more coverage than you need is just unnecessary. The moral of the story is, get your records organized and maintain them so you are always prepared for an audit of any kind.
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What exactly is an audit? The dictionary says it is a thorough examination or check – an in-depth examination of every part of a process. That applies whether you’re talking about accounting audits or workers compensation audits. You usually hear the term in relation to business. Basically, it means going over everything to do with whatever part of the business that is subject to the audit.
Should you be worried about a workers compensation audit? Well, the truth of the matter is you should only be worried about an audit if you haven’t been straightforward in your work practices as it is now a felony to intentionally mislead or misrepresent your risk to an insurance company. However, many people get worried about audits simply because they’ve not kept paperwork up to date – which can happen due to time pressures. In that case, facing an audit means scrambling around trying to get things in order that should really have been done as part of normal business practice.
As long as you maintain your paperwork, and you aren’t involved in anything you shouldn’t be, an audit need not be a stressful experience. You should have accurate records of all your financial income and expenses for an accounting audit. For workers compensation audits you need to have employee payroll records up to date. For stock audits, your picking lists, order forms and invoicing will be required. The more up to date you are, the less stressful the audit should be – and the less time the auditor will need to spend on the examination!
Insurance Brokerage and Risk Management
