Payroll Process Improvement Ideas for Constructions Firms

Author: Eugenija Steponkute
Published: 16/07/2022
improve payroll process

This is an article for the finance department and operation managers of construction firms. In it, we will share our insights on payroll process improvement, how it drives profit and its impact on your overall performance. If you are trying to get a buy-in from the stakeholders for new software, this is a piece for you.




The construction industry is known for its rather intricate payroll: many companies use both permanent and contract workers. There are also different fees based on tasks, locations and other variables. And then there are aspects such as overtime and expenses. In other words, the payroll process is often very complicated and, unless it’s well optimised, can lead to rather disastrous consequences. 

While payroll is among core business procedures as it ensures worker compensation, it is also very prone to human error - mostly due to the above-mentioned complexity. The good news is that there are ways to avoid them by simply taking the human out of the process. If you like the sound of it, then continue reading for we will be sharing some payroll process improvement ideas we highly recommend you take on board. 

Payroll Process Improvement Through Automation

Your best option to improve your payroll process is to adopt automation. Unlike other measures, it doesn’t focus on just one area and can instead be applied across multiple steps of the procedure. Additionally, once implemented, the level of automation you’ve set can be easily adjusted, optimised and expanded as you move forward.

In fact, through automating the payroll you won’t just be improving the effectiveness; you will also be opening yourself up to more in-depth data that will unlock a path to future opportunities. Additionally, it will also expose redundant or underperforming areas of the process you can address right away. In other words, when you choose to automate the payroll process, you will be setting yourself up for never-ending possibilities for improvement. 

Reduce Manual Calculations

Not only do manual calculations take a lot of time but they are also highly susceptible to mistakes. When money is involved, such mistakes come out very costly. Logically, to minimise the risk and win back the hours you can repurpose for more progress-driving tasks, you want to do less counting yourself and have more of it assigned to digital tools. So, how can you achieve that in payroll? 

Shift Scheduling Based on Rates, Overtime and Holidays

While you’re not likely in charge of shift scheduling, the person who is, heavily relies on your calculations. And if the schedules they’ve put together are involving a lot of variables such as differentiating rates, overtime pay or any other add-ons - calculating becomes more tasking to you. Not to mention, the more complex the calculations are, the more likely you are to make a mistake. Underpayments, overpayments, and a plethora of other complications will follow - as well as the increased threat of the next schedule being put together to be just as chaotic. 

A shift scheduling software may not sound like something you would have much use of as you won’t be working with it directly. However, very often it’s an inclusive feature of a bigger platform. Instead of getting it as a stand-alone tool, try and get your hands on a pay and bill software that offers it as a function. This way you won’t have to worry about potential miscommunication between your numbers and the schedules, and the complex irregular schedule-influenced calculations will be taken care of for you.

Employee Expenses Management

Despite the simplicity of the concept, employee expenses are a sore spot for many companies, especially in the construction industry. From having to buy additional supplies mid-project to workers spending their money on petrol to move from location to location, they are inevitable. The reason it’s problematic is that most businesses have not designed their processes to run properly.

Employees are prone to losing physical receipts. Furthermore, when they accumulate too many of them, it will take a longer time to submit them. If you don’t have a digital platform, you will also be bound to arrange the receipts by date and the submitter manually which, depending on the volume, can take days. This is why we recommend a designated expense management system that is easily accessible on different devices. When they have it on their phone, employees can submit expenses on the go, simply snapping a picture of the receipt. It will then be stored on a web document storage that’s easy to navigate using filters and changing the order of files based on name, submission date and others. 

Automate Accounting Processes

The good news is that calculation isn’t the only area you can automate to improve the effectiveness and performance of your payroll process. You can also apply it to accounting procedures in order to speed them up and boost accuracy. Not to mention, this will also provide you with quick in-depth reports you can then analyse to base your company’s future development plans on.

Invoice Generation and Distribution  

Complex and irregular rates don’t only complicate the calculation but also the process of invoicing. Not to mention, the purpose of the invoice is not to just bill the client but to also outline what are they paying for; meaning the inclusion of the services provided and their unique rates. Putting an invoice together, depending on how detailed and rate/task-diverse it is, can also be a tedious, time-consuming process in which it’s easy to make a mistake you cannot afford.

Most of the finance-related software, however, offers the service of automatic invoice generation. This means it will pull the data you feed into it, such as employee hours, rates, etc and crunch it into an invoice within seconds. What’s more, depending on the solution, you can easily send it to the client without exporting the file or closing the software.  

Easy Data Transfer and Quick In-Depth Reports

Some tools also integrate with accounting packages, allowing you to send invoices to a different solution in the same way you’d pass it on to the client. In fact, it’s a two-way connection. This means you can also easily pass data from tool to tool, therefore unlocking the ability to analyse the same data from different perspectives and in greater depth. This, in fact, also allows you to collect even more data, enriching your reports with new insights you’d otherwise have no access to.

Another positive aspect is that you won’t have to worry about fishing the new heaps of the said data manually to then put it into a comprehensive report. That is another lengthy process you will be able to automate for near-instant completion and improved accuracy. The only manual tasks for you will be choosing the filters of what metrics you want to have insights for and from what period. The rest, including visualisation for easier analysis, will be handled by the software you fed the data into.

Why Change the Payroll Process?

While we presume you’re here because you’re not satisfied with your company’s current payroll process, we don’t exclude the possibility you need to pitch the idea to the stakeholders. We recommend you pull the numbers to defend your case - especially the time the current processes take. Then, armed with this argument, draft out other, revenue-driving areas where the time could be used instead. 

You Can’t Afford to Waste Time

You know better than anyone that time is money. When you waste it on manual tasks that can be handled by software at a greater speed, you are ultimately paying more than the subscription of an automation tool costs. In other words, while some digital platforms can come off as pricey, their ROI largely comes from the fact they prevent money loss in the first place. Additionally, with the human error factor taken out of the equation, there’s a lesser probability to lose money to mistakes.

With that said, it’s also worth noting that automating payroll procedures can also discover a lot of opportunities. Whether they’re to point out ineffective and overly-costly procedures,  areas that deserve more investment or any other area of the company, the reports generated from data collected through automation can help you boost the business. After all, there’s always room for improvement - and by automating, you’re putting a highlight on what to address first. 

Key Takeaway 

There are many challenges financial departments of construction companies need to overcome when dealing with the payroll. There are many variables to take into consideration when calculating employee compensation: location, deliverables, time rates, overtime, expenses and many others. In other words, it can get confusing and lead to mistakes. However, there are ways to reduce these risks and speed the operations up, improving their overall quality simultaneously. 

Automation is the best solution for payroll process improvement. It’s not limited to just one procedure, it’s flexible in how much of it you want to use and can be easily applied to a huge range of business processes. Automating the payroll saves time, boosts accuracy and delivers in-depth insights. In other words, not only will it provide ROI, but also continue exceeding expectations as you go.

Ready to embrace payroll automation? Turn to Timesheet Portal.

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