If you have employees then you pay into workers comp. And every year you probably go through a workers comp audit which verifies whether what you paid in premiums matches what you paid employees based on the hours, dollars and type of work your employees did during the year. Usually the auditor will give you a list of what they’re looking for in the audit. If you process payroll in QuickBooks there are some tools that you can use to pull your workers comp audit information together much faster and sometimes save you additional premiums.
1. If you process payroll in QuickBooks, you can track your Workers Comp. Turn on the Workers Comp feature in the QuickBooks company preferences (I know many are unaware of that feature that “sneaked” into the preferences.) This feature will take effect from the date that you set BUT will not go retroactive. Since many of you are in the middle of your workers comp year, this will give you only some of the information that you need for this year, but next year you will have all the information that you need.
Next, enter the different workers comp codes that you have for your organization. You’ll find your list on the form from the insurance company. From the Menu Bar in QuickBooks, click on List>Workers Comp List. Then fill in the information you see below.
Enter your experience mod factor.
Then either assign a code to an employee in the employee record or, if your employee does multiple types of work for you, assign the code to the actual work they do when you enter their information in their timesheet.
Once the codes are in place and you’ve paid employees, you can run reports that will show you what has been paid under the various classifications; I’m sure the auditor will like these reports, too! QuickBooks will also track what you should be paying workers comp and then you can compare that with what you are actually paying in workers comp premium.
2. If you don’t process payroll in QuickBooks, Classes could be an option if you use Classes to represent the type of work they do (I know this is not an option for everyone). But this feature helped one of my clients actually pick up an additional code that had a lower rate.
3. Assuming your auditor comes every year, there is probably a set group of reports they request. Create a group of reports for Workers Comp so that you just have to run the group. This would be a 2-step process. First, create a group in the Memorized Reports list, then run a report and memorize it and put it in the Workers Comp group. To run the group, you can either go to Process Multiple Reports and select the Workers Comp group or to your Memorized Report list and double-click on the group name (all reports will run).
Contact our office if you need assistance or want to delve further into Workers Comp. In the meantime, I hope this saves you time and money!