Consider these ideas that use accounting software.
Keeping up with job costs is crucial for your business, but job labor is definitely one aspect of overall job costs to watch more closely. Following are considerations for tracking labor costs in six areas with your accounting software.
Payroll. Do you outsource your payroll, do it in-house or some combination? For some, it might depend on staffing, such as how many employees you have or who on staff handles payroll. Depending on the software you use, you might find that by entering paychecks in your accounting software you’ll be able to generate more accurate job-costing data. If you outsource your payroll, there might be work-arounds that enable you to see job-costed labor in your accounting software. Because your invoices and bills are usually there, it’s easier to have reporting in one place.
Hiring checklist. If you create paychecks from your accounting software, then you’ll have to set up all wage information for each employee. For those who experience those mad rushes in the spring, it can be quite a task to have to set them all up quickly and accurately. See if your software supplier has a hiring wizard feature that can walk you through the necessary steps. If not, create a hiring checklist. Many times bookkeepers (especially new ones) don’t know all the information they need to gather, such as I-9s or reporting new hires to the state. And in the hectic pace of early spring, it can be easy to miss a step. A checklist helps ensure all steps are completed, even if they’re not all done at once.
Templates. When you do payroll in-house, try to create a basic template so you can set up employees quicker. Here are options:
- Perhaps most are paid hourly, so you can have an hourly wage ready to go. Then, just the rate needs changing.
- The same might be for overtime. Maybe there are other common wage considerations.
- If most employees live in the same state, set a default state for withholding. Then, you’d need to change only those living in different states.
- Maybe most employees are single or married. If so, then perhaps state or federal filing status can be set up in the template, too.
If you outsource payroll, ask about importing options. Even importing a basic journal entry can save time; but sometimes you have more importing options that could yield better job-cost reporting.
Workers’ compensation. Can your software or payroll product track workers’ comp? If so, that can save time during workers’ comp audits and give you an idea if you’ll owe additional money or receive a refund. Also, workers’ comp products work on a pay-as-you-go option, making it easier on cash flow. (You owe more when you have more working, and you pay less when your workforce is smaller.) This can reduce the number of surprises come audit time.
Time tracking. Time on the job is a crucial factor in job costing and one that can be more difficult to control, but it definitely needs monitoring. Entering the time can be time consuming, especially for the maintenance crews because they work in so many different places in one week. So, look for ways to quicken data entry. For
example, is there a way to enter the time for the crew versus individual employees? That can be a huge time-saver.
Also, there are many industry- and task-specific products that let crews track time in the field on their mobile devices and integrate that time into the company’s accounting software. This feature not only saves a lot of time, it tends to be more accurate. In many cases, the software includes GPS tracking so you know employees are actually on the job. Many of these products also allow foreman to track the time for the crew versus individual employees. Some also have a Spanish-language option.
Reporting. Look to see what reporting you can generate that will show hours and dollars for time on the job. Predesigned reports might be available, or you might need to customize reports to generate the information you want. These reports might be found in your payroll reports, or there may be a group of job-cost reports that can give you the data you want.
You might not be sure how much of the aforementioned can be done in your accounting software or how. You also might find your bookkeeper doesn’t always have the correct answers. Sometimes it’s worth reaching out to a professional who works with accounting software so he or she can tell you what’s possible and what’s not. Then you can map out the ways to generate the data you need so you can account for your labor costs.
Quick tip:
There are many industry- and task-specific products that let crews track time in the field on their mobile devices and integrate that time into the company’s accounting software.
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