Construction Company Chaos Becomes Calm, Cool and Collected
We had a lot of fun with this client—we knew the industry well and knew we could assist in sorting out their payroll disarray. They were in a difficult state at the time we met them, with staffing, cash flow and many accounting issues. We worked closely with them initially to support them through a big period of transition and business process change, so that now they have a lot more time to spend on managing the business proactively rather than playing catch-up with a chaotic set of accounts.
The company has a large turnover and 60-80 regular staff. When we met them, one staff member was taking three days per week to complete their pay runs using manual systems (including Excel) and then entering them into Xero.
On inspecting the Xero payroll setup, it was obvious to us that the employees and pay items had been set up incorrectly, with many errors that then made the payroll very problematic (not to mention completely incorrect in the financial accounts). The contractor who had set up the accounts for this company was no longer involved as it had become obvious that they were out of their depth, which prompted the owners to get assistance and change their payroll processing.
First, we cleaned up the payroll settings, payroll items, leave entitlements, superannuation settings and regular pay templates.
Then we tidied and structured the chart of accounts, deleting dozens of obsolete accounts that had been unnecessarily used in payroll reporting and were making the job more complicated than it needed to be.
We entered many months’ worth of pay runs from Excel, and then reviewed discrepancies when compared to cash that had left the bank. Additional entries were processed to correct these errors.
Once the payroll history was tidied up, we reconciled all the payroll-related accounts: superannuation, PAYG withholding and payroll tax.
In addition the client wanted all staff costs, including superannuation, Co-invest, Incolink, workers compensation insurance and payroll tax allocated against job-tracking categories in Xero. Manual journals were entered to allocate jobs to these staff costs. RDOs were also tracked in Xero payroll.
Next we liaised with Deputy to integrate this rostering, timesheet and payroll management solution with Xero. This has made a big difference to the way the company manages their jobs, locations, timesheets and employee scheduling, with much of the process becoming streamlined for easy manager approval and syncing into Xero. Deputy manages modern award specifications, rostering, timesheets, locations, jobs, award-specific allowances and much more, and fully integrates with Xero.
We worked closely with the admin staff and Deputy Enterprise technical help—we recommend this solution for many businesses that need extra timesheet and payroll functionality.
This company uses Procore for managing project financials. The Xero general ledger was modified to match Procore more closely. Total labour costs broken down by project were supplied for entry into Procore. We liaised with their internal staff to ensure that Procore and Xero financials matched up once all data had been entered each month.
We also assisted with other important areas of the accounts: we activated bank feeds for all bank and credit cards; we implemented Dext to help manage their accounts payable; we trained them in how to run and customise financial reports; we set up correct taxable payments annual reporting; we set up inventory items with full detail so they could be used meaningfully in sales and purchases; we implemented tracking categories for additional reporting functionality; and we trained the accounts payable staff in how to make batch payments to suppliers by using ABA files.
It has been very satisfying being able to put into practice much needed changes for this company over the months we worked closely with them. The payroll that used to take three days every week now takes an average of three hours per week. The staff member who used to spend so much time manually entering and tracking payroll no longer works weekends, and has the time to chase customers for payment—resulting in a more positive cash flow for the business.
The owner of the business and the payroll staff now look forward to payroll rather than dreading it—and are very relieved that they can now run accurate reports on a weekly basis. They are definitely in a better place than when we started with them and very pleased that their payroll is now accurate and up to date. Now that the staff have had training in how to use Xero appropriately, they can manage the day-to-day payroll and accounts for a large and complex business with greater confidence.