by Katie Clutz, Proactive Risk Management Executive
These challenging times are unprecedented for everyone, especially small business owners. Managing and maintaining payroll has become even more difficult. However, there are options to help you manage your worker’s compensation premiums and better control your cash during the uncertainty of the Covid-19 pandemic and recovery.
Our agency offers our customers two proactive services giving the ability to closely monitor their payroll throughout the year. They are:
MIDTERM PAYROLL REVIEW
This service allows you, as an insured, to course correct if you under or overestimated your payroll at the beginning of your policy term. This mid-term check on your payroll allows you to avoid having a large out of pocket expense after completing your audit. By checking in mid-term, we can adjust the payroll to match the actual trending values. That way you don’t have to pay a large out of pocket expense, which is typically due all at once.
PAY-AS-YOU GO OPTION
Most business are experiencing a tighter than normal budget during the COVID-19 crisis. Another option to effectively manage your workers compensation payroll is to use a “pay-as-you go” basis. Most workers compensation carriers offer this type of arrangement. It allows you to manage your payroll in “real-time” with your payroll provider. The business owner makes smaller and more frequent payments on your workers compensation premium. No deposits are required, allowing you to manage your cash flow better while you’re business is experiencing fluctuations with staffing. For example, you will only be paying for what you need based on how many employees you have working. The“pay as you go” option is great for those retail stores and restaurants that have experienced a significant variation in staffing because of mandatory closings or reduced staff.
The biggest benefit of using a “pay-as-you go” program throughout the year is that it will make the audit process go much smoother. Since you will be reporting actual payroll amounts to the carrier through your payroll provider rather than estimating at the start of the year, you will be much closer to the actual payroll and not owe much, if any, at audit time.
Contractors in particular can benefit from a pay as you go option when their jobs slow down during certain times of the year. This allows them to reserve their cash when they do not have as many projects. You can enroll for this benefit when you renew your policies.
Either of these payroll management options are important to consider! All of our agents at Keller Stonebraker Insurance can assist with setting this up for you and help to make your insurance program more efficient.