Time cards, also known as timesheets, are essential on every construction jobsite.
This guide covers how to improve the process of collecting time data from the field-as well as how you can get the most out of time card data to improve your business.
Why are time cards important in construction?
Time cards serve a very practical purpose in construction—tracking employee hours so they are paid accurately. But in terms of construction management, the benefits go beyond the sole purpose of paying employees.
Here are a few more reasons time cards should be a priority for any construction business.
When employees are consistently paid accurately and on time, they know they are valued at a company. Underpay an employee-or pay them late-and workers are quick to find employment elsewhere.
Employees expect to be paid for their work, and employers have a duty to meet these payments. Still, many construction companies struggle to meet this responsibility-and as a result, have higher employee turnover.
With an ongoing labor shortage, employee retention is more important than ever. With a limited workforce, losing any employees can have a significant impact on your company's ability to finish a project on time.
The time card process can also impact employee retention in the office—a stressful payroll process can lead to burnout, causing a high turnover rate in accounting.
Accurate job costing with cost code data
Once cost code data is incorporated, the benefits of time cards can go beyond employee retention. Time card data that organizes hours by cost codes gives you more detailed visibility into individual project efficiency.
Receiving this type of information allows you to check on productivity throughout projects—providing real-time data to make more informed decisions.
Better estimates for future projects
Time card data can also help you plan ahead—especially when it's easily accessible and organized. Time data that includes detailed information on time spent on projects, broken up by cost codes, helps you make better estimates for future projects. This allows for better financial planning, and ultimately, a greater financial return.
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How payroll teams use construction time cards
Understanding the importance of time cards, it's time to look at how they're collected and used by payroll teams.
The payroll process
While every company's payroll team will do things a little differently, the process usually looks something like this:
Field supervisor collects and approves time cards
Feld supervisor drops of paper time cards with payroll
Payroll manually copies data to a spreadsheet
Payroll sends pay checks
While this seems like a pretty straightforward process, remember that this involves communication and coordination between workers on the jobsite, their supervisors, and the office payroll team.
One delay in communication can throw everything off course.
Payroll pulls attendance and productivity data
Assuming this process runs smoothly and payroll receives all needed communication, payroll is able to organize time data and share valuable insights with management, including:
Hours spent on projects
Payroll compiles data, ensures there are no errors, and passes this data on to management so they can plan for more profitable projects in the future.
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Common problems when using construction time cards
From subcontractors to CEOs, timesheets provide value to everyone in a company—from employees receiving payment, to management receiving quality data to plan future projects.
It's important for the payroll process to run smoothly, so that your company can focus on moving projects forward. However, many companies experience issues collecting or using time cards. These are a few examples of common problems in the payroll process:
Chasing after paperwork
Chasing after paperwork
Most construction companies have experienced chasing after paperwork at some point. Collecting and hunting down paper time cards can take up a significant amount of time for payroll, especially since this is a recurring task.
Manual entry and re-entry
With paper time cards, payroll must manually transfer all data onto a computer. This can be a tedious process, and manual (or double) entry can lead to errors. Aside from time, needing to review work to find an error can be incredibly frustrating.
Alternatively, the error may go unnoticed, and you are left with inaccurate data to base future projects off—which can be costly for your company.
Resource and talent drain
Because employers realize the importance of paying employees on time, some construction companies will use all their resources to help payroll complete payments on time.
Companies that pull employees who don't work in payroll to help calculate and deliver payments are wasting valuable resources (time and money), as well as talent. If a company ever needs to put other projects on hold in order to pay employees, improving the payroll process should be a top priority.
And it should go without saying that payroll is only part of an accountant's job. If your finance team is spending a majority of their time on payroll, they can't take the time to look at big picture issues that could grow your business's revenue.
Underpaying or overpaying employees
Simply trying to do things faster is not the answer, though. Hastily paying employees, or an unorganized payroll process, can also mean overpaying employees. This may keep employees happy, but it can also cause significant damage to your company's budget over time.
On the flipside, underpaying employees is another possibility with more immediate side effects, as disgruntled employees are quick to find work elsewhere.
Inaccurate or little cost code data
Another side effect of a rushed payroll process and manual entry is a lack of reliable data. If payroll or superintendents are rushed, data may not be well organized or even documented.
Writing cost code info using pen and paper on a busy jobsite isn't the easiest task. This means you won't have real-time knowledge of project productivity, or the insights to make more accurate estimates for future jobs.
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How to make construction time cards more efficient
Understanding the importance of time cards means you can prioritize making this an efficient and reliable process and avoid the common issues that make payroll a time-sucking task.
By improving time card and payroll processes, you will inevitably improve the overall efficiency and organization across your company. Here are a few ways you can get started:
Field-based data collection
Want to improve communication between the field and office? Field-based tech can make it easy for field crews to quickly enter and send time card data to the office for real-time visibility. Being able to quickly enter data onto a phone or tablet allows supers to enter more complete, consistent data.
Digital time cards also eliminate the need for payroll to chase supers down to collect paper time cards or verify data or approvals. Digital time cards—designed to be easy to use in the field—make life easier for supers and payroll, so everyone is happy.
More accurate job costing with cost code data
Time card technology can make it easy to include cost code information, with some software even providing insights into job productivity. Productivity insights give you more project visibility with cost code comparisons and real-time data.
Remove the need for manual re-entry
Submitting digital time cards means payroll no longer has to copy data over to a computer. Not only does this save a significant amount of time—it also eliminates the opportunity for error caused by entering information incorrectly. Plus, when your time card software integrates with your payroll software, even more time is saved.
Preset permissions and time card locking
Time card software often includes permissions and time card locking, so that you never have to worry about someone editing time card data after it's been approved. That means payroll teams can be confident they get the most accurate time data for payroll processing.
Benefits of organized construction time card data
We've already mentioned a few benefits of time card data, but let's talk more specifically about the benefits you'll undoubtedly see when using the right tool to digitally collect time cards.
Improved communication with stakeholders
Have you ever had to explain unexpected project delays to stakeholders, weeks after they occurred? Knowing where projects stand in real time means you can keep stakeholders up-to-date on all changes to project timelines—and correct any inefficiencies before they add up.
At the end of the day, no matter how well you communicate with stakeholders during a project, there's always a chance a dispute will arise afterwards. Having digital time cards means you have organized evidence of all the work put into a project—making it easy to prove work completed.
On a day-to-day basis, you also have real-time visibility into any work hours that are outside the original project scope. This means you can ask for payment, or make changes to improve time efficiency, as project changes occur.
Project productivity data
Construction projects are constantly moving, making it near impossible to find several hours of free time where you can sit down to analyze data. Thankfully, digital tools are incredibly helpful when it comes to analyzing and understanding data.
With the right tools, you can have real-time access to productivity data, giving you the ability to:
View time spent on each cost code
Compare hours worked against timeline goals
View financial impact of overtime hours
Often, you can combine time card data with other productivity data for even more insights—so you have complete visibility into financial spend and performance at a glance.
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Construction time card software
What features should you look for in digital construction time card software?
Make sure the tools you choose allows for:
Mobile data collection
Unlimited custom cost codes
Mobile data collection
The first rule of implementing any software in construction is that it has to be easy to use and access.
Software should make the data collection process easier, not over-complicated. Look for a simple user interface that works via any mobile device, so your crew can track time in the field using the devices they have in their pockets every day.
Unlimited custom cost codes
Time card software for contractors needs to be flexible to be most effective. The more granularly you track time, the more insights you'll have to support hiring and purchasing decisions.
When you can add unlimited custom cost codes to time cards, you can track work hours exactly the way your business needs. You can evolve your processes with the business, and you aren't forced to track time by the software developer's requirements.
Managing overtime, double time, and any other kinds of pay rates can be a pain, especially across multiple service areas with different laws and requirements.
Your construction time card software should help you manage overtime by setting rules and automatically applying them based on the project.
Some construction time card solutions go the extra mile, consolidating time card data and helping you apply it.
Automated insights demonstrate how work hours are spent and what that means for project progress.
Your time card software should integrate with your accounting system to reduce manual data entry and prevent payroll errors.
Get the most out of your construction time cards with Raken.
Our easy-to-use digital time tracking app saves valuable work hours for the field and office.