Construction costs can be unpredictable, making them hard to effectively manage. Construction payroll — one of the biggest, if not the biggest, operational costs for contractors — brings its own unique challenges. With more companies already operating closer in the red than black, the threat of uncontrolled payroll costs jeopardizes not only their per-project profitability, but their ability to scale up to take on larger, more lucrative and reputation-enhancing projects.
Fortunately, as complex as construction payroll-related costs are, they don’t have to be unmanageable. Thanks to evolving capabilities in advanced construction software, much of the traditionally manual processes involved in payroll can be streamlined to manage not only payroll and job costing, but to leverage related data for future use.
Budgeting and forecasting technology, and construction timesheet software in particular, can deliver dramatic improvements in payroll cost reduction and management. Let’s take a look at some key advantages you can look forward to.
Increased accuracy of construction payroll data
Even the most organized of manual processes simply can’t match the ability of budgeting and forecasting software to gather payroll data while ensuring its accuracy.
To really get the most out of this software’s capabilities, mobile access is a must. Think of where a significant amount of construction payroll data is sourced: out in the field. It’s by far the most practical way to ensure timely payroll data collection when there are hundreds of craftspeople across scattered jobsites within your portfolio. Software with a mobile app feature invites accurate data entry by the craftspeople themselves right from a jobsite mobile device. With correct, direct input from the get-go, there’s no longer the threat of data re-entry redundancy, human transcription errors, and memory lapses of time worked — all of which lead to data unreliability and time logging.
The accuracy of your time-logging data feeds into other related construction payroll information that depend on it for calculating the correct pay rates, appropriate withholding taxes, deductions, and so on. This is where the value of the software extends beyond the weekly paycheck. Go back to how payroll costs represent a huge portion of operational expenses. Think of how many errors have been made in the past when using hard-copy timesheets. A few extra minutes figured into a timesheet here and there may not seem like much. But those initial errors, no matter how small, add up, potentially snowballing into unnecessary overpayment of total construction payroll expenses over the course of a long-term capital project. Precise time logging via the software is the first step in ensuring this scenario doesn’t play out. In the end, that can help protect your profitability.
Better planning, costing and staffing for future bids and estimates
Apart from recording clock-ins and clock-outs, the software can also collect specifically defined data such as the amount of time worked per task, the cost center to which the task is assigned, equipment used, etc. These details are what helps inform your future projects, making today’s data the basis for tomorrow’s capital project bids and estimates.
Large capital projects are expected to have more fine-tuned job costing. Your real-world numbers stored from past projects supply are going to offer that level of accuracy. From a construction payroll perspective, you’re able to quantify staffing needs right down to how many craftspeople it takes to complete each individual task. Further, task duration data helps inform a more realistic scheduling estimate. This level of precision you gain from drawing on past data reduces the likelihood of incurring overtime costs to make up for understaffing or an overly ambitious timeline or paying site crews to hang around because of overstaffing.
Using this labor cost and schedule data from your estimate becomes the project’s standard against which to gauge cost and schedule performance through the course of the build. As your project progresses, you’ll be able to precisely forecast the cost and timing of the work that remains.
A note about government-funded jobs: When you’re bidding on these, including those that are part of the Infrastructure Investment and Jobs Act, your budget and forecasting software should have a feature that enables you to produce certified construction payroll reports that detail prevailing wages and compliance.
Measured and managed real-time productivity to improve your bottom line
You can’t manage what you don’t measure. Dashboards incorporated into the software offer you a way to effectively monitor how your construction payroll and related labor costs are aligning with your estimates. They also make it easy to track performance and progress of site crews and individual craftspeople.
Their visual formats make trends and anomalies more noticeable, which can actually provide you with some helpful insights you can act on in real time. So, for instance, with what you’re learning throughout a build, are any tasks taking more or less time than anticipated? Is a task requiring more or fewer craftspeople? Were there parts of the build that saw increased charging of overtime? Noticing these trends can help you course-correct in real time by realigning time and labor resources so there’s no compounding impact on costs and bottom line.
Gaining real-time visibility and insights into the data that feeds into your construction payroll management and other cost-related areas is possible through InEight budgeting and forecasting. See how it can give you more control over your projects’ financial health by requesting a demo.
