The U.S. Chamber of Commerce explains that many small businesses choose to do their own bookkeeping and accounting but it requires extraordinary organizational skills. After all, it’s tough to keep records, receipts, invoices, job costs, payroll, material costs, and everything else in order when you’re trying to run a business.
According to research from Visual Capitalist, 82 percent of companies fail due to cash flow problems and construction has the lowest level of survival rate, with 75 percent failing within the first year and 40 percent failing by the fifth.
Accounting specialist J. Carlton Collins, CPA writes in the Journal of Accountancy that underutilizing accounting features and inadequately implementing paperless technology are two common mistakes that accountants for small businesses make.
This makes sense, since, in order to keep accurate records, you need accurate information in a consistent manner. If you’re using ClockShark, you can get accurate pay rate information and run detailed reports based on the information collected, to help you keep track of how much you’re spending on labor.
If you’re a small business that handles the payroll, you can use these reports to make tax time easier, too. Just run a report for the pay period and then configure the taxes.
What Is A Pay Rate Report?
A pay rate report is a detailed report showing how much the labor is costing on a particular job. It can be separated by unique categories such as by job, by task, by employee, or by employee type, for example.
Whether you have subcontractors, 1099s, or W2 employees, sorting through the labor cost of a job is challenging if you don’t use technology to accurately track the data.
How Does the Pay Rate Report Help?
When you can login and run a report on a specific job, you will have a clear picture of how much it’s costing and use it to determine if there is an issue that might need to be addressed, such as not budgeting enough for a particular aspect of the job.
Additionally, pay rate reports help you perform job costing more accurately and profitably by being able to reference the true cost of labor for previous, similar jobs. This keeps you from over- or under-bidding jobs.
You can also compare previous hours spent on similar jobs with other employees to determine if there might be a need to evaluate your workers.
While it won’t help you calculate the true labor burden for each employee, you will have a solid, accurate report of how much the jobs are costing you in direct labor. Since the pay rate report shows details on regular, overtime, and double-time pay, you’ll have a clear and accurate picture of your labor costs.
Pro tip: Running a pay rate report by tasks helps you identify which tasks employees are completing on the jobs and grouping the report by department helps determine which departments are costing the most.
How to Run A Pay Rate Report in ClockShark
With ClockShark, running reports is super simple. Before running reports, ensure you have the accurate pay rates entered for each employee. You can see how to do this, here.
This is how to run a Pay Rate Report to stay on top of your labor costs:
→ Navigate to the Reports menu item on your dashboard
→ Click Pay Rate on the dropdown menu
→ Select the date range you wish to view
→ Choose whether to group by employee, job, or task
→ Select individual employee(s), job(s), or task(s) if you don’t choose to include all.
→ Download the report in your preferred format (PDF or CV)
Using ClockShark’s Pay Rate Report will help you find the strengths in your labor costs and identify potential areas for improvement so you can nail your job costing and estimating for future jobs and make payroll and tax time much simpler and more accurate.