PAYROLL REPORTING

Overseeing the compilation of the payroll figures to be used for the audit is extremely important. Always insist that the audit be performed on your premises so that you can assure that the information they are using is accurate.

Take time to fully explain to the auditor exactly what it is that your company does and the specific function(s) performed by various employees and departments. Always request and review the auditor's worksheets when the audit has been completed.

Know who your employees are. Most states make you responsible for uninsured independent contractors.  Keep a file of certificates of insurance from your independent contractors providing proof of worker's compensation coverage. Also review your 1099 payments and make sure they reflect only payroll payments to truly independent contractors. Make yourself familiar with the rules in your state for the treatment of independent contractors.

Finally, make certain that overtime pay is equalized down to straight time pay. Usually overtime pay reflects an increase in the rate of pay for work in excess of hours normally worked or in excess of 8 hours in a day or 40 hours in any week.

It is important to be prepared for the auditor's visit.