Among the many complexities of running a construction business, one of the most stressful is Certified Payroll. For nearly 100 years (beginning with the Davis-Bacon Act of 1931), businesses working with federally funded contracts have faced the usual obstacles of payroll processing (accurate job coding, tracking wage laws and hours, and chasing after approval), with the added pressure of submitting Form WH-347 on a weekly, bi-weekly, or monthly basis.
If a construction company is found non-compliant, several penalties (from high daily fees to legal ramifications) can jeopardize the business. Unfortunately, even the most by-the-book companies can face these risks if they continue to use manual payroll processes.
Did you know that studies by Finance Online revealed that almost 40% of US businesses still use pen and paper to track employee time?
If you’re a construction business on the fence about automating your Certified Payroll Process with Davis-Bacon software, read and learn more about the challenges of manually processing certified payroll and how certified payroll software can empower your human resource specialists–not replace them.
Construction businesses are some of the most susceptible to Certified Payroll violations. This can have very little to do with the integrity of your team but is instead a reflection of the integrity of your data collection processes.
While an industry that often overlaps with technological advancement on job sites (new equipment, drone technology, etc.), many construction firms still rely on manual data entry for their accounting and human resource departments. Here are the risks of avoiding automation in your back office:
Certified Payroll is often submitted weekly, which can be highly challenging if a construction company still uses paper timesheets and digital spreadsheets.
Aside from the strain it puts on the field team and project managers trying to track their work hours and job codes, it’s an unnecessarily arduous and time-consuming process for your payroll department. This is especially true if you’ve only got one or two payroll specialists trying to manage multiple job sites (federal, private, and commercial).
Collecting paper time sheets, chasing down answers to questions, making corrections, playing “approval tag,” and manually entering (potentially) hundreds of lines of data into a spreadsheet…means that human error is nearly inevitable.
Aside from frustrated employees and inaccurate bookkeeping, your business is at risk if Certified Payroll report errors make it to the federal client. Penalties for certified payroll violations include:
What’s the difference between minimum wage and prevailing wage? The site americanprogress.org provides an excellent compare and contrast, as well as additional insight into the nuances of prevailing wage law.
While the risks of inaccurate certified payroll are unsettling, implementing industry-specific certified payroll software is a simple and cost-effective way to adhere to prevailing wage laws and stay on schedule with report delivery–here’s how:
One of the biggest benefits of construction time tracking and payroll software is automation. While it may feel risky trusting computer code with the complexity of certified payroll, it actually improves your human payroll specialist’s workflow by eliminating manual data entry and automatically tracking and categorizing labor hours. Hence, it creates a lower risk of human error.
Due to the Davis-Bacon Act, it’s vital to stay ahead of prevailing wage laws and ensure unflinching accuracy in hours worked for hourly wage employees.
Note: Prevailing wage doesn’t apply to salaried employees in executive and administrative roles.
Because certified payroll solutions like hh2 are developed in the cloud, your software is always up-to-date with the latest data and wage laws, allowing it to calculate even the most complex hourly wage data easily. This is especially valuable since nearly half of the United States has unique prevailing wage laws to keep track of in addition to the Davis-Bacon Act.
By digitizing time tracking and automating payroll processes, certified payroll software speeds up payroll by a staggering 70%. With so much time saved, your accounting specialists are better able to submit WH-347 forms on time, regardless of how many federal contracts they’re managing.
Eliminating the need to fill out and drop off paper timesheets significantly boost productivity. Giving field teams the power to clock in from their mobile devices (no matter their location or time) improves accuracy and helps avoid common fraud activities like “Buddy Punching.” With time-tracking data centralized in one place, your back-office team can more easily collaborate with project managers to increase efficiency.
Not just any payroll software can handle the complex needs of the construction industry. To ensure your business stays secure, compliant, and profitable, here are three key features to look for when shopping for certified payroll software.
There are numerous ERP and accounting software that help construction businesses operate efficiently. Thus, any certified payroll solution must be able to integrate seamlessly with any accounting systems you already use. Aside from avoiding unnecessary stress and interruptions in productivity, it also ensures you’re making the most cost-effective choice by not having to rebuild an entire accounting ecosystem from scratch.
Implementing technology should improve the ease and efficiency of your business processes. Simply shifting from analog to digital (e.g., transitioning from paper timesheets to digital timesheets) doesn’t necessarily yield the best overall ROI. Automation is non-negotiable if you want to rest easy regarding accuracy and save on labor costs otherwise spent on manual data entry.
Honest human error is one of the most significant contributors to construction compliance issues. The right software will automatically update itself on the latest wage laws and rates. It should also be able to immediately catch problems or errors to avoid unintentional violations after submitting reports.
No More Hypotheticals: How Certified Payroll Software Actually Influences Real-World Businesses
But What Really Happens When You Invest in Certified Payroll Software?
The benefits of integrating certified payroll software don’t have to be conceptual in this post, as we have a real-world story demonstrating just how revolutionary certified payroll software and automation can be for your construction business.
How Anchor 41 Increases Accuracy and Efficiency of Certified Payroll with hh2
Take a look at this hh2’s convert’s story to see the remarkable boost to efficiency and revenue the right certified payroll software can offer.
By introducing automated certified payroll software to improve accuracy and enhance efficiency, you can position your business for growth. When you’re no longer reluctant to bid for federal contracts out of fear of accidental violations, you can solidify your business as a trusted partner for larger-scale projects that serve your community.
Explore hh2 Certified Payroll Solutions and optimize operational efficiency.