There’s a lot of money in government construction. Between 2000 and 2011, contractors received $232.2 billion from the federal government alone. The American Recovery & Reinvestment Act of 2009 alone allocated $130 billion towards construction projects. But whether you’ve completed many government projects or have yet to submit your first bid, you probably know the mandatory weekly paperwork can be intimidating.
All federal, state, local or municipal contracts over $2,000 are covered by the Davis-Bacon Act of 1931, which requires companies to pay their workers the prevailing wage for their area, which includes an hourly rate and certain fringe benefits. The difficult part is that contractors have to document this in detail. Every week, contractors are required to submit a specially formatted report which details which project each worker worked on, how many hours they worked on it by day, and their rate of pay, along with how much money was contributed to qualifying plans like health plans, vacation funds, pensions, and union dues. If a worker performed more than one task type (carpentry and general labor, for example), detail for each must be documented. Some contracts even require temporary breaks in the work to be documented with “No Work” payroll reports. Twenty-six states issue their own forms, and several of these states have multiple agencies or departments that have separate reporting requirements.
If that sounds complicated, there’s more bad news—you’re also responsible for making sure each one of your subcontractors is compliant. The U.S. Department of Labor says that accurate payroll reporting and correct documentation is ultimately the contractor’s responsibility, and they’ll hold them accountable if their subcontractors aren’t following the rules. Contractors who aren’t in line with the standards can face fines, hefty back payments, and even debarment from future projects.
So should you just skip government work? Hardly. There are several software solutions that make payroll reporting a painless (or nearly painless) process. These products use the data you’ve already entered for payroll, then create the reports—all you have to do is sign and submit.
All inclusive or add-on
While each payroll reporting tool is a little different, there are two basic types: all-inclusive or add-on. Large-scale, complex construction management systems such as Construction Partner, Timberline or AccuBuild often include a payroll reporting module. Since all the data is already there, generating a report is a relatively simple process. This functionality can be useful for very large companies who already have this sort of system set up, but there are some disadvantages. The reports are only available to those who have the accounting system in place, but that isn’t practical for every company. Many contractors either can’t afford a complete system (which can cost thousands of dollars per module) or don’t wish to go through the time and effort of setting one up. Also, since all-in-one systems are meant to replace every part of your project management system, they may not be compatible with the other programs you’re using.
To address this need, several software companies have introduced applications that work with existing payroll systems. However, there’s a big difference in how the work gets done. In companies that process payroll in-house with QuickBooks, users can experiment with Sunburst Software Solutions. Their Certified Payroll Solution generates prevailing wage payroll reports along with other required paperwork. Carlos Martin, the president of the Boca Raton-based All Phase Environmental Inc., has used their add-on module for six years and says it saves time over doing every step by hand.
“We always look forward to the next upgrade,” Martin writes. “We have been able to greatly increase our customer base since we now have the resources to quickly and accurately complete tasks that were so time-consuming in the past.”
The downside of this solution, of course, is that it isn’t compatible with any of the major payroll providers. It relies entirely on in-house accounting and payroll with QuickBooks, so if you don’t already use that software, you won’t be able to use this system.
One way to avoid those compatibility headaches is a web-based software as a service solution like Certified Payroll Reporting by Points North. Web-based programs work with a wide variety of payroll providers, and they provide several advantages over desktop-based software. The reports are accessible from any computer, and the data is protected in the event of a fire or accident. Furthermore, as the forms get updated, there’s no need to install new software or purchase an upgrade—it’s automatically updated every time you log in.
The biggest plus, however, is the integration with leading payroll providers. Many contractors process their payroll with ADP, Paychex or Ceridian. Certified Payroll Reporting is fully compatible with these providers, which means contractors can simply log in to the program, upload their payroll and produce their reports. Western Enterprises has used Certified Payroll Reporting, and it has saved them time and money.
“The time savings provided by Certified Payroll Reporting save our company more than $12,000 per year,” a company spokesperson writes. “I would definitely recommend this solution to my industry peers.”
Certified payroll reporting requirements aren’t going away any time soon, and with new auditors being added, it’s very important to stay compliant when doing government work. Using products like the ones mentioned above can help you avoid fines and debarment, and give you peace of mind. Whatever option you choose, payroll reporting software solutions can save you time and money—and that’s what good business is all about.