Join the Mobile Technology Bandwagon
Thursday, January 3, 2019
Direct labor is one of your biggest costs, but tracking it can be an administrative nightmare. Workers often bounce from site to site, incur different labor rates for each job, and record time by hand, leading to all kinds of potential mistakes.
Fortunately, mobile technology can automate the timekeeping process at a minimal cost. In addition, global positioning system (GPS) tracking provides an easy way to audit the accuracy of employee time reports. Not only can these technologies save you money by eliminating mistakes and confusion, but they can also reduce fraud risks and provide more timely, relevant job costing information.
Do You Still Use Manual Time Sheets?
Among the most time consuming activities in any construction office are organizing timekeeping records from all the different crews and entering their hours into the payroll and accounting systems. With multiple crews working on multiple jobs, reporting their hours at random intervals, office personnel frequently become frustrated, especially if supervisors submit timesheets late.
Errors often happen when employees try to recreate time records at the end of the week (or month!) They also occur when office personnel attempt to decipher sloppy handwritten reports. Delinquent or inaccurate timesheets can cause you to underbill jobs or underpay employees for overtime. Inaccurate time reports also can get you into trouble with a union, if you employ union workers.
Case in Point: Public Works Projects
Public works projects provide a classic example of why timekeeping records need to be accurate and on-time. These projects typically require certified payroll reports to be submitted with your firm's requisitions for payment. Rectifying underreported hours is not as simple as cutting the employee a manual check on payday.
If all (or part) of an employee's time does not show up on the certified payroll report, his or her time won't be billed to the customer. Your firm will either be forced to absorb the underreported wages -- or you can try to submit an amended requisition for payment and hope that the customer will voluntarily ante up. But public works projects often have rigid payout schedules and limited budgets.
Reap the Benefits of Mobile Technology
If your firm has more than one project running, has more than one employee working at a time, or pays more than one labor rate per employee, mobile technology can help you and your managers run a tighter ship.
Instead of reporting time manually, your employees can clock in and out remotely using company-provided mobile devices, such as cell phones, smart devices or laptops. Typically, workers "punch in" every time they enter a job site using a quick response (QR) or numerical code that's posted onsite. When they leave the site, they must "punch out." Hours post automatically, eliminating the need for office personnel to re-enter manual timesheets into your accounting and payroll systems.
By enabling devices with tracking, you'll receive GPS coordinates every time an employee punches in or out with his or her mobile device. This means you'll know every moment of the day who's working and where. Not only can this help with scheduling of employees and subcontractors, but GPS-enabled devices also allow you to compare time records to workers' alleged physical locations to ensure that the records are accurate – and that employees aren't padding their timesheets to artificially boost hours.
As an added bonus, employees can use their mobile devices to photograph job progress, physical defects and unsafe site conditions. In turn, managers can use the photos to make faster, better informed decisions. Photos can sometimes eliminate the need for supervisors to make emergency onsite inspections. You can also compare photos to percentage of completion reports prepared by your controller for an added level of assurance.
An alternative to mobile timekeeping technology is installing fingerprint stations at every major jobsite, with every employee having access to a profile to punch in and out. You can program the stations to send encrypted information of every punch by every employee, with fingerprint authorization for security and authentication. When jobs are done, you can move a fingerprint station to the next jobsite.
Real Time Job Costing
The best part about automating timekeeping functions is that automation provides owners and managers with more accurate, real time job costing data. Accounting personnel receive the data needed to review and approve payroll faster. Real time data collection allows errors to be caught and corrected sooner -- often before payroll is processed and checks are cut.
Timely job costing has another benefit: It improves your bidding process for future projects. Suppose you've just finished remodeling a school on the west side of town that took 325 hours to complete. The district is accepting bids on an almost identical remodeling project on the east side of town. If you're confident that your timekeeping records were accurate on the west side project, you'd eliminate much of the guesswork required to bid the east side project.
Moreover, the process of comparing budgeted labor hours to actual time records can help owners and managers evaluate the accuracy of the bidding process. If labor costs on a job are unexpectedly higher (or lower) than expected, you can investigate why and improve operational and bidding efficacy going forward.
Consider Your Mobile Technology Options Today
Mobile technology can never take the place of common sense and a physical presence, but it can reduce some of your administrative headaches and free up your office staff.
Call your accounting adviser to discuss the most cost-effective and secure mobile solutions to automate your timekeeping and payroll functions. By so doing, you can lower costs and risks, improve accuracy, and receive more timely financial reports.
Once your mobile solutions are in place, your accountant can teach you how to make the most of mobile technology on a day-to-day basis. Greater operational efficiency can be achieved through GPS-guided scheduling, budget-to-actual comparisons and real-time job profit reports. A CPA who specializes in the construction niche has helped other firms automate timekeeping and knows what works best, based on firm size and specialty.