Intuit conducted a question and answer session with QuickBooks Online Advanced Certified Accountants, Lynda Artesani and Matthew Fulton, to hear what they had to say about the role insurance advisory services play in enhancing their client relationships.

Q: Why is it important to evaluate your workers’ comp every year?

Lynda: Ensuring compliance and the right coverage is always #1 in my heart with my clients. My clients are very involved in running their businesses and they don’t always think about things such as workers’ comp insurance. Some don’t even realize they need it or that it’s required by law. Let’s face it: Failure to adhere to state worker’s comp regulations can leave an employer exposed, not only to paying benefits out of pocket, but to paying penalties levied by the state as well. With a severe injury on the job, it could bankrupt a business.

Insurance helps me enhance my advisory role and build trust. I help my clients make sure their employees are in the correct class codes for their industry. This can save them money if any of their employees are miscategorized. In addition to class codes, experience modification rates need to be accurate so there are no unwarranted or closed claims that affect the premium. Nothing gives me more satisfaction than saving the client money because they appreciate it so much.

Matthew: Quite simply, workers’ compensation rates can, and do, change from year to year. There are many different factors contributing to premium rates, including job classifications of employees, estimated annual wages, experience modification factors, and state assessments. Accountants have partial control over estimated annual wages, job classifications and other areas. However, state assessments and experience modifiers are outside our control. So, to ensure my clients are always receiving the best possible rate, I review their policy to see if any classifications should be changed based on a revised job description or change in hourly wage.

For example, within certain industries such as residential or commercial painting, there are multiple class codes for the same position where the hourly wage is the factor that defines the employee classification. If a state reduces the hourly wage that would trigger a different job classification—as California did recently—some employees end up misclassified, which may result in an overpayment or underpayment of workers’ comp premium at the end of the year.

Q: Where are the opportunities to introduce Pay As You Go workers’ comp and other insurance to clients when delivering value-added professional advisory services?

Lynda: The best time for me to introduce Pay As You Go to my clients is during the onboarding process or in discovery meetings when we discuss payroll. In these instances, workers’ comp conversations occur naturally. If the client already has insurance with another worker’s compensation insurance provider, we will go over their policy and make sure they have the right coverage. While some may be hesitant to make a change to Pay As You Go, they’re receptive if the change can result in savings or better coverage. It’s nice to be able to show them all the options available and to help them switch providers if warranted.

Matthew: Every time we bring on a new bookkeeping client, our team goes through a substantial review process. This is when we evaluate their peripheral business relationships and see if there are any immediate issues that need to be addressed or opportunities to improve, such as switching to Pay As You Go.

1099 processing is another opportunity to discuss Pay As You Go workers’ comp. As the end of the year approaches, our team reviews all vendor payments to determine which subcontractors need to receive a 1099 for the services they rendered. During this process, we also review the certificates of insurance on file which introduces another chance to ask about Pay As You Go.

As a trusted business advisor, it’s common for our clients to ask our team to handle their workers’ compensation audits each year. Depending on the insurance carrier, the preparation can take as much as four hours to complete. This presents another opportunity to introduce Pay As You Go in the context of alleviating unnecessary end-of-year stress.

Other instances to introduce Pay As You Go include any major change in payroll, especially if the company is cash flow-sensitive and the changes will significantly impact their premiums. Budget reviews are yet another good time to introduce it since we evaluate money spent on workers’ compensation to date and potential variances that may result in over or underpayment of premiums.

Q: Why do you recommend that your clients use Intuit® and AP Intego?

Lynda: AP Intego is easy. Its partnership and integration with Intuit make the insurance-buying process convenient since the process is done within Intuit Payroll. You simply click over one tab to begin the workers’ comp process. Additionally, close ties with Intuit provides our clients with a sense of trustworthiness and confidence in AP Intego’s insurance expertise. Intuit doesn’t partner with just anyone!

Matthew: I recommend AP Intego for a variety of reasons. AP Intego makes it easy for us to request a workers’ comp policy quote. AP Intego offers policies from 19 carriers and 39 state funds, so the rates are competitive, and allows them to easily match or beat another company’s quoted rate. Their staff is also very knowledgeable and helpful. With so many variances between different states, AP Intego helps us stay on top of all the rates and job description changes every year.

Q: What is the most significant value of AP Intego to accountants?

Lynda: What I love about AP Intego is that Pay As You Go aligns workers’ comp premium payments with the business’ cash flow. For example, one of my clients is a contractor in Rhode Island. He is really busy with work in the summer and has the largest payroll at that time. But, in the winter, cash is tight and his payroll is far less. The flexibility of Pay As You Go works really well for him because of his cash flow challenges. He doesn’t have to make significant advance payments when cash is tight because the payments are rendered based on real-time payroll versus estimates. He only pays the higher premiums when his staff and revenue are also at their highest levels and the cash is there to cover those payments.

Matthew: That’s easy; workers’ comp is tied to payroll so payments are automatically calculated, eliminating the manual data entry of traditional workers’ comp and keeping the paper trail consistent and clean. Without Pay As You Go, the payroll totals must be calculated manually and typically requires our team to generate custom reporting. So the usual 3-4+ hours spent preparing for a traditional workers’ comp audit is dramatically reduced to as little as 15 minutes. I simply run a payroll report and the required data is all there.

For more information about transitioning your clients from traditional to PAYG workers’ comp, contact QuickBooks Payroll Workers Comp at 866-389-0444.

Editor’s note: You can help your clients understand workers comp by becoming familiar with Intuit’s program. Click here for details.