Documentation Needed For Audit
Welcome back! As we mentioned in the first video of the series, the purpose of the audit is to determine your actual payroll for the policy period being audited. The only way to figure this out accurately is to look at tax and accounting documentation for the time period covered by the policy being audited. Here is the type of information you may be asked to provide:
- A description of your business operations
- Employee names and job duties
- W-2 and 1099 forms
- Tax forms, particularly forms 941 and 944, Employers Federal Tax Return
- Accounting ledger
- Records of cash disbursements
- Payments for services provided by independent contractors
- Payments for services provided by subcontractors
- Certificates of insurance for each subcontractor you hired
- Payroll records for the term of the policy
As you can see, they may ask for a LOT of tax information and financial documents that you’ve never been asked to produce other than by your accountant. However, there is no need to worry as insurance companies have the same privacy regulations as your accountants and will not share this information with any outside parties.
See our fourth video on business audits.
