I'm currently working with a client who owns a very successful and fast-paced remodeling business. Unfortunately, he worked with another agent prior to working with me and was never guided on how to prepare for an insurance audit.
We are now helping him to navigate through total chaos. If you're a contractor and you've experienced an audit, you know how crazy they can be. By applying three simple tips, your audit can be made much easier. Tip #1: Divide and Conquer Set up two separate bank accounts, one for payroll and sub costs and the second, for all other items: materials, marketing, office supplies, etc. It is also crucial that you do not mix your business expenses with your personal expenses. THE DO NOT MIX! Tip #2: Gather Certificates Make sure you are collecting certificates of insurance from every subcontractor you work with and keep those certificates filed safely away in case they are needed for an audit or claim. You'll want to make sure your subs' insurance limits are the same as yours-not less. To make sure you are as protected as possible, require that your subs add your company as an additional insured on their certificate. A little FYI, there are special endorsements you can require your subs to add which will add an additional layer of protection for YOU. Feel free to reach out to us if you'd like to know what these endorsements are or if you would like a sample certificate to use for refrence. Tip #3: Work With a Bookkeeper You're busy. I know. You're watching your expenses. I get it. However, you may be as surprised as I was to find out how inexpensive working with a bookkeeper can be. If you're small, it can cost as little as $50 a month - depending on who you're working with. Working with a bookkeeper allows you to focus on bringing in the money instead of managing it and better ensures you're going to have a really well done profit and loss statement (which your auditor will request.) I have several bookkeepers whom I have personally trained. Should you decide to work with one of them, your audit becomes incredibly easy. They send me the information I will need, I forward it to your auditor, and you are finished. It can be as easy as that. Had my client known these tips and applied them, he would have been saved dozens of hours searching for check stubs, certificates, and bank records. If you'd like to know more, receive recommendations for bookkeepers who are familiar with the insurance auditing process, or would like to connect with us please reach out. I'm happy to help. XOXO Your favorite insurance lady, Shauna
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