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Three ways to keep more money in your pocket

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Three ways to keep more money in your pocket

Reducing costs tops every contractor’s wish list. The obvious place to trim dollars is often on the job site. But don’t stop there. Costs savings can also be found in how you handle everyday administrative tasks. Take workers’ compensation, for example. With a few tweaks to how you do things, you can save some significant dollars. Here’s how:

Take advantage of multi-rate workers’ compensation

Many states allow construction companies to use a workers’ compensation rate specific to the task being performed. Understanding the multi-rate structure for your state and setting up your time reporting system to capture when employees are working on lower rate tasks can add up to significant savings on your workers’ compensation. The key is having a good set of data that can prove your eligibility for lower rates.

Reduce false workers’ compensation claims

Few things create more concern for contractor than a large workers’ compensation claim. Sadly, false claims cost many contractors thousands of dollars. While it may be impossible to stop an employee from filing a false claim, many contractors believe an effective deterrent is to add a signature line and the following statements to employees’ daily timecards:

  • I was/was not injured today.
  • I did/did not witness an injury today.
  • Describe injury in detail.

Leverage qualified benefits on prevailing wage projects

If you are a non-union contractor who performs prevailing wage work, you must pay the required fringe benefits. This payment is typically provided as additional cash wages, which can increase your payroll and consequently result in higher workers’ compensation premiums. However, if you have a qualified health care or vacation benefit program, you can offset the cash requirement with the value of your qualified plan, keeping your payroll lower. This requires establishing the hourly value of your qualified benefit plan prior to calculating the payroll, then deducting this value from the required cash benefit.

Are these cost cutting tips useful for your business? What are you doing to keep your costs in check?

All three recommendations in this blog post can be more easily handled with construction software like Sage 100 Contractor. Visit our Sage 100 Contractor web page for more information about what construction software can do for your business.

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