Saving money on different expenses is the most important concern for every business owner. Cutting the cost and managing available resource plays a crucial role in increasing the profit-ratio and cash-flow of the business. Perhaps, managing the financial aspects such as the insurance premiums for workers’ compensation demystifies the consequential up and downs and payments for accidents/injuries of employees. If the business finds it difficult to manage workers compensation costs, they can opt for pay as you go workers comp software to manage the premium costs every pay period.
The ABCs of Pay-As-You-Go Worker Software
It’s important to understand workers’ compensation billing in order to understand Pay-As-You-Go Workers Compensation Software. A standard Workers Comp policy typically demands an upfront deposit, based on the annual gross wage estimate for all employees. The employer pays the estimated premium to the carrier during the policy year.
At the end of the policy year, an annual audit is required to reconcile all the estimates with what was actually paid out in employee payroll. In this case, if the total estimated premium that was paid does not match the actual premium that is due based off actual wages, the employer needs to make up the difference with a lump sum payment. This billing method is dated.
What exactly is Pay go WC?
Pay as you go workers comp sets a new trend in workers compensation insurance policy billing. Under the pay-as-you-go concept, an employer can combine or bundle up their worker’s compensation premium with their payroll. They sign a contract with a payroll service to withhold and pay their worker’s compensation premium each pay period based off actual wages, just as they do for their payroll taxes. The business owner will typically be provided with a single bill that includes their payroll, taxes, and workers compensation premium for each policy period. This is an alternative billing methodology to the traditional estimated billing for workers compensation insurance.
Special Highlights of Paygo software:
- More accurate premiums based on actual payroll not estimates, which can protect you from audit exposure.
- Eliminates large installment payments
- Remove additional payments due at audit
- Ease of annual policy audit
- Healthier cash flow
- Real-time evaluation of premium payment history and calculation
- Payment is automatic – no checks to write
- Convenient access to insurance experts
- No surprises at audit time
Pay-as-you-go Workers Compensation in Summary
Pay-as-you-go software is a no hassle payment approach to paying for workers compensation insurance that is a great cash flow tool for any business. InsuranceTrak provides this unique billing program through TrakPay, which is a robust software and integrates with multiple insurance carriers and payroll companies. If you’re using a payroll service like ADP or Paychex, then TrakPay would not be a good fit for you as they have their own in-house insurance agency. If you’re using another payroll service, or processing your payroll manually, then we are typically a great fit for your business needs. We can help to shop the best carriers so that you don’t have to contact each company individually for quotes, which will save you a great deal of time. We will definitely save you a ton of money and hassle.
If you are serious about lowering your overall workers compensation coverage cost, take a close look at the above information. Wondering if your current program will work or not? Give us a call and let an InsuranceTrak agent show you how to reduce your workers compensation costs.
Pay-as-you-go workers comp software with TrakPay thru InsuranceTrak will save you big money, improve your cash flow, and free up your time from the administrative hassles of traditionally estimated workers compensation billing. Give us a call today for a free consultation!