Managing Construction Payroll – Tips to Follow

Collect Timecards Everyday:  When employees track their time by the week, they can easily underestimate time missed and overestimate time worked;  that is simply human nature.  In fact, by managing construction payroll daily instead of weekly, your business could save an average of one hour per week for every field employee.  That can really add up.  You could save more than one full week of pay for every field employee each year.  Saving that kind of money certainly justifies the extra effort of collecting time cards each day.  Using daily time cards also enables you to better monitor production, spread out your office workload, and spot inconsistencies in reporting sooner rather than later.  

Profits in Action:  Use the Daily Payroll option in Sage 100 Contractor to enter your construction payroll for the previous day.  At the end of the pay period, simply process the daily records into timecards and print your checks.

Segregate Time Worked to Save on Workers Comp: Many states allow construction companies to utilize a workers compensation rate specific to the task being performed.  Segregating a workers time into the most appropriate risk group can save you a lot of money.

Managing construction payroll – it works like this.  Say one of your employees spends four hours forming sidewalks and four hours framing the sub-floor on a house.  On that employee’s timecard, reflect the two different tasks so your business can receive the lower workers’ compensation rate for sidewalk forming.  Assuming that the workers’ comp rate for carpentry work is 25 percent, the sidewalk workers’ comp rate is 9 percent, and the employee’s pay rate is $20 per hour (for both types of work) for an eight-hour day, the math works as follows:

• Without segregating the employee’s time, here’s what you would pay for workers’ compensation:
• 8 x $20 x .25 = $40.00
• What you pay now: (4 x $20 x .25) + (4 x $20 x .09) = $27.20
• You save: $12.80 on every $160.00 in wages  |  Profits in Action: This savings represents 100 percent pure profit and Sage 100 Contractor can do all of the work for you.

Try to Reduce False Workers’ Compensation Claims:  Few things strike more fear into a contractor’s heart than a large worker’s compensation claim.  Sadly, false claims cost many contractors many thousands of dollars.  While it may be impossible to stop an employee from filing a false claim, many contractors believe an effective deterrent is to add a signature line and the following statements to employees’ daily timecards.

• • • • • • I was/was not injured today.
          • Describe injury in detail _________________
          • I did/did not witness an injury today
          • Describe injury in detail

Profits in Action: Use the Sage 100 Contractor Timecard Report to print a project-specific timecard that includes all cost codes for the project.  Ask employees to complete one and drop it in a lockbox on the job site before leaving for the day.