No matter what industry you find yourself in, having workers' compensation insurance is an absolute must if you have employees. This remains true regardless of the size of your business. Without workers' compensation coverage, not only could you end up being held liable for an injured employee's medical costs and lost wages following a work-related injury/incident—but you could end up facing penalties and fines from your state by not carrying the right amount of coverage.
At the same time, workers' compensation coverage can be costly–and paying these premiums can be cumbersome. Fortunately, there's an easier way. By automating your company's workers' compensation payments through a reliable pay-as-you-go platform, you can protect your hard-working employees while saving your business money and enjoying added peace of mind.
Benefits of Automating Your Workers' Compensation Payments
When you automate your workers' compensation payments through a payroll-based premium calculation and collection program, you and your business will enjoy numerous benefits.
For starters, it's important to understand that workers' compensation rates are calculated. based on a percentage of payroll. Often times, companies are required to pay an estimated premium amount that is based on the prior year’s payroll. Unfortunately, this can lead to an overpayment by the company. Yes, they receive the money back eventually—but in the meantime, cash flow is being tied up for no good reason. This approach can also sometimes lead to underpayment and, to the surprise of the policy holder, payment of a lump sum at the end of the policy term following a premium audit.
Fortunately, there are other options. Paying workers' compensation as you go with each payroll period allows you to pay what's actually owed versus what was simply estimated based on the previous year's payroll. As a result, you get to enjoy a more accurate payment and can avoid overpaying (or underpaying) for your workers' compensation. This frees up additional cash flow for your business, especially in situations where payroll has decreased for a particular pay period.
This can also be extremely beneficial to those with seasonal businesses, since these businesses can then pay only during months when they actually have a payroll and avoid paying premiums during months when the business is closed for the season.
Finally, in the event that workers' compensation premiums increase for any reason, the adjustments can be reflected in the next pay period and each one thereafter so that you're not hit with a large and unexpected bill come audit time. And of course, if premiums decrease, paying as you go allows your business to feel the benefits of those rate reductions more immediately.
Begin Automating Your Payments Today
As you can see, there are many benefits to paying your workers' compensation payments on an as-you-go basis, and the best way to do this is through the use of payroll-based premium calculation and collection software. The TRUPAY® platform, offered by Split Limit, makes this possible.
With this platform, business owners enjoy added convenience and improved cash flow while avoiding audit surprises. Find out more about Split Limit's innovative TRUPAY® platform by contacting us today!