Construction companies face unique challenges when it comes to payroll processing, especially if they do government work. And while payroll may not seem like a critical function, it actually has the ability to directly impact your company’s profitability. It can also impact your ability to create accurate bids and compete. This makes your choice of payroll software or service an important business decision.
If you’re not sure how to find the best option for your company, we can help. Here are some of the top areas you’ll want to evaluate before you commit to any payroll software or payroll service.
Time tracking is directly tied to your company’s profitability. If you’re a company that relies on bidding or estimating to get new work, it can also impact your ability to compete. Construction companies that do prevailing wage work have an elevated need for tracking both hours and work classifications, which often have various pay rates based on role, project and even geographic location. For this reason, you’ll want to look closely at how time tracking is handled, from importing your current time sheets to options for a fully integrated time-capturing system that offers the advanced features you need.
Construction companies that do prevailing wage work must track fringe credits on each employee, including accounting for different annualization requirements. This means you need a system that is able to calculate the maximum allowable credit for each employee and recalculate hourly credits as employer health contributions or PTO changes. You’ll also want to look for a system that can generate updated fringe benefit reports when employees become eligible for benefits. Be sure to ask specific questions about fringe management and reporting before you commit to any certified payroll software or service.
Overtime rules can be complicated and they vary from state to state. If your construction company does prevailing wage work, overtime can be even more difficult to calculate. Since failing to pay all required overtime can lead to significant problems, including compliance issues, you’ll want to ask for details on how it is handled. If you work on government contracts in multiple cities and states, you’ll need to make sure that the software or service is capable of adjusting for the laws of each area.
Paid time off (PTO) policies are guided by both legal requirements and your company’s own policies. This can be more complicated for construction companies, especially if you do a mix of prevailing wage work and private projects. For this reason, it’s important to make sure that the certified payroll software or service you choose is capable of adjusting to your needs. It should easily be able to manage your PTO policies, calculate jurisdictional requirements, forecast balances and prevent negative balances.
Construction companies that do government projects have a range of reporting requirements, from certified payroll to union and apprenticeship reporting. Keeping up with these reports can create quite an administrative burden, but failing to do so can lead to legal and financial trouble. Having certified payroll software or services that can easily handle your most time-consuming reporting tasks will make your entire operation more efficient. You might even be able to take on more government projects once this area of your business is streamlined.
Payroll and HR teams used to be responsible for just about all of a company’s data. This meant that every time an employee needed to make changes, even simple things like updating their mailing address, they had to get help. This created a lot of busy work for administrative teams that could be doing far more than simple data entry. These days, it’s possible for employees to manage a lot of their own data. Certified payroll software and services often allow employees to update their personal data, including direct deposit and tax info. This reduces the workload of your admin team, freeing them up to handle more important tasks.
Certified payroll software and services can actually do a lot more than just help you process payroll and simplify reporting. By including important HR functions, your construction company can streamline a variety of time-consuming, but essential, tasks. For instance, employee onboarding, benefits enrollment, background checks and asset and certification tracking can all be simplified through software. This will make it far easier for your company to handle growth and deal with workforce attrition.
Easy to use
While switching software or services will always require some adjustment, some systems are just easier to implement and use than others. You’ll want to look at the interface or dashboard to see if it is easy to understand and navigate. Ask what training is available, like how-to videos and hands-on help when you need it. You’ll also want to ask for a demo, during which you should plan to ask lots of questions. There is no substitute for seeing the system in action and getting real-time answers to your most pressing questions.
Mistakes and problems happen, no matter how diligent your team is. But when we’re talking about payroll, problems are just about always urgent. After all, we’re talking about paychecks! This is why it’s so important to have access to customer service when you need. It. You should never be more than a call or email away from help and answers. Pay attention to how you’re treated before you make any commitment and look for reviews and referrals when possible.
Last but certainly not least, be sure to ask about the implementation process. How long will it take for your company to be onboarded? What type of access and information will be needed? Will you receive any training to make the transition more smooth? This will help you know what to expect, but also allow you to more fully compare your options before making a commitment.
The material presented here is educational in nature and is not intended to be, nor should be relied upon, as legal or financial advice. Please consult with an attorney or financial professional for advice.