Your Annual Construction Liability Insurance Audit - Is part of the renewal process. Your Initial insurance premium is based on an estimate of your gross sales and your payroll to help your insurance company determine the amount of risk your company is exposed too.
We Have A Conference Room - You can use to meet with the auditor and we can have someone from out office present if you want it. Many times we meet with the auditor and can do most of the work without you needing to be there.
Your Insurance Audit Is - Similar to Estimates vs. Actuals report you generate for your Job Costing Reports. The audit will determine how much was under or over billed on the preceding year based on what your sales and payroll amounts. These numbers are also used to determine the amount of next year’s premium.
The Audit Process - Is an open book test because you have the list of questions ahead of time. It is just a matter of finding the answers in a timely manner (by the appointment date if a in person physical audit)
It Is A “What Is” - Type of test as there is no wrong answer; however, if you have the answers without the proper supporting documents that could cost you a bundle of money.
QuickBooks For Contractors - Can really help, if it is setup correctly, push a few buttons and have the printed reports in less than ten minutes.
Auditor Can Require:
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In Person Physical Audit - The auditor fills out the audit form
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Auditor Will Require - Copies of your detailed reports
Auditor May Require:
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Voluntary By Mail Audit – Forms sent to your company for you, your bookkeeper or outsourced accounting company to fill out based on QuickBooks reports.
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Auditor May Require - Copies of Detailed Reports
Audit Request May Come - By email or USPS letter
*Premium auditing involves obtaining information from a policyholder’s financial records in order to adjust insurance premiums. Policyholder information is allocated among various classifications based on state and / or insurance jurisdictional rules and regulations. Results are submitted to insurance carriers for premium adjustment and statistical rate making. Premium Auditing is not the formal examination of financial records for accounting purposes.*
Your Insurance Company Wants To Know Early And Often What Jobs You Are Bidding - The names of other contractors are involved (sharing the risk). For Larger Projects many contractors liability insurance companies would like to see the Prime Documents before the bid is submitted.
Your Annual Insurance Audit - Report is touching sales / payroll / taxes. Insurance companies do not discuss how much access they have / do not have to a State / Local / Federal records to cross verify information given which is why many auditors require copies of actual payroll and sales tax reports filed.
QuickBooks Reports Will Have - Many of the answers needed to fill out the annual Insurance audit form. Having a clean set of books makes the process more efficient and less painful as the report is asking for information in multiple ways.
QuickBooks Makes It Easier - To fill out the forms and it is possible you may save money on premiums. Having an outside accountant is helpful because they deal with this stuff year round. It could save you more in time and money than you spend to have it taken care of by a professional because we know where and what information is needed to complete the report.
QuickBooks Expert Specializing In Construction Bookkeeping Services
About The Author:
Sharie DeHart, QPA is the co-founder of Business Consulting And Accounting in Lynnwood Washington. She is the leading expert in managing outsourced construction bookkeeping and accounting services companies and cash management accounting for small construction companies across the USA. She encourages Contractors and Construction Company Owners to stay current on their tax obligations and offers insights on how to manage the remaining cash flow to operate and grow their construction company sales and profits so they can put more money in the bank. http://www.fasteasyaccounting.com/sharie-dehart/
