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Why choose pay as you go workers' comp over the traditional estimated billing method?
Businesses, small or large, need to keep their employees happy and safe. Employees always face the risk of suffering on-the-job injuries. Injuries can affect an employee for an extended period distancing them from work. These are tough times for both you and your employees. This is where workers' compensation insurance helps you out. The regular workers' compensation billing method is outdated, and many businesses are switching to the latest billing method which is called pay as you go workers comp.
Pay as you go workers comp insurance allows you to pay your premiums during an actual payroll period. It differs from traditional workers compensation billing, which depend on your anticipated, or estimated annual gross payroll wages to come up with an estimated annual premium. With this billing method, at the end of your policy, you need to complete an audit to adjust your premium paid based on what you actuall did in annual payroll wages versus what was originally estimate. Paying as you go can protect you from financially prohibitive audit surprises, as your premium depends on real-time payroll compensation, and not an estimate.
Here are some benefits of getting pay as you go workers comp insurance:
- No large up-front down payments are involved in pay as you go workers comp insurance. Traditional methods have business owners paying a large sum when initiating this type of insurance. The insurance, typically being mandatory, cannot be avoided. Pay as you go billing frees owners from large up-front costs.
- Once you choose to pay as you go, you use employee's real-time payroll wage data and pay a premium based on that payroll. This allows for better accounting and cash flow for your business.
- The traditional method had owners dealing with timely annual audits. These audits, though necessary, can be costly and painstaking. Honestly, no owner likes an audit. With pay as you go, one can easily minimize time spent on audits. The pay as you go workers compensation billing method will save time and money, and will give you more time to spend on more important activities, like building your business
These are some benefits of choosing pay as you go workers' comp insurance. The simple process of reporting actual payroll wages, and only pay premium based off those actual wages, make it a great alternative to the traditional estimated billing process. If you are a business owner using the traditional method of estimating payroll and premium, InsuranceTrak can help you with an easy transition to the better pay as you go billing method. Get in touch with us today to learn more.