Payroll can be a hassle for construction companies. What if you have employees with multiple rates? Maybe you have employees with different job classifications, pay scales, and locations. What if you have to pay employees using different tax rates? Not to mention with the new Earned Sick Time Laws, you now have another item to track for employees. So yeah, handling payroll can be tough. Just a decade ago almost all of the payroll process was done on paper. With the emergence of technology, that is no longer the case. Now, a payroll function is a standard requirement of any construction accounting software package.
DISADVANTAGES
There are real disadvantages by not using construction accounting software to conduct payroll.
Extra steps and extra costs. One of the biggest disadvantages is the fact that more work will be required to run the business. If you use construction accounting software for most of your accounting but then have to go outside to conduct payroll, that is just more work for your accounting staff. Also by using an outside payroll service more costs will be added to your budget.
Lack of integration. The main way to track the progress of a job is to see where the budget is. A big part of the budget for a job is the labor cost. By not using construction accounting software to conduct payroll, it will become much harder to track how much of your budget is going to labor. By using construction accounting software for payroll, you can feed labor into your Job Cost, allowing you to see where you stand on jobs in real time. By using an outside service, more manual labor will be required to import labor data into your construction accounting software, taking employees away from other important tasks.
BENEFITS
Using construction accounting software to conduct payroll comes with real benefits.
Self-sufficient. Conducting payroll in Construction Accounting Software comes with many benefits. First is autonomy. When working with an outside service, you are now dependent upon others for your payroll. What if you need to make a quick change or notice an error? Your business will be at the mercy of the outside depending on how responsive they are. By using construction accounting software to manage payroll, you have full control and the ability to make last minute changes.
Direct deposit. There are many advantages available to using construction accounting software for your payroll, direct deposit being one of them. If using an outside service, direct deposit may not be an option, pay stubs or checks would be have to be mailed out to employees. With construction accounting software, you can use the Payroll module to handle direct deposit and then email out paystubs to everyone, saving you time and money.
MULTIPLE FEATURES
The Payroll module in construction accounting solutions offers a whole host critical functions. Set up the system to automatically manage employees pay rates, job classifications, different tax rates, and various compliance reports. Inquire on specific employee information, and drill down to the details and keep earnings history indefinitely. Most importantly, all of your payroll information is integrated, allowing for proper bidding or forecasting future jobs. These are things are become much more difficult to accomplish with an outside payroll service.
There are some who choose to go outside to handle of their payroll needs. One of the advantages to using construction accounting software is that it is now you have total control over the process. If the goal is to keep your business operations streamlined, then consider using construction accounting software for payroll. If you are already employing construction accounting software for other parts of your business, then why not payroll?
About The Author:
Eric Goldstein is the president of C/F Data Systems. With more than a quarter century of experience in the construction software arena, Eric has led C/F Data’s ongoing development of the company’s flagship solution, STRUCTURE. He began his career at ADP, and first joined the C/F Data System sales department in 1985 and was quickly promoted to vice president of sales. After sales positions with Timberline software and Textura, Eric returned as C/F Data’s president in 2009.
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Modern Contractor Solutions, March 2017
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