Among recent shifts in the economy, construction firms find abundant opportunities for new projects. The Infrastructure Investment and Jobs Act alone injects approximately $550 billion in federal funding into various sectors, including roads, bridges, and water infrastructure across America.
However, while the influx of investment opens doors for construction companies, it also presents challenges, particularly for those venturing into publicly funded projects for the first time. Concerns such as navigating diverse pay structures across different jurisdictions and adhering to stringent reporting requirements can complicate project management and cost control, introducing a new terrain for many construction enterprises.
Often consumed by the demands of project execution, construction businesses may overlook the intricacies of compliance and management. Many executives and administrators in the industry are unaware of the complexities they may encounter, leading to potential issues and missed opportunities in the long run.
As a trusted advisor to construction firms, the Baldwin CPAs construction team is here to guide these firms through the evolving landscape while offering solutions and tools to streamline operations and increase profitability. Some of the key complexities firms will need to address, include:
- Expanded workforce and skill sets: Pursuing government contracts may necessitate augmenting the workforce with additional labor, potentially requiring different skill sets such as specialized engineers or project managers to meet compliance standards.
- Cross-jurisdictional operations: Working across different municipalities and states demands a deep understanding of prevailing wages and local laws in order to adhere to the Davis-Bacon Act. Staying abreast of regulatory updates and filing accurate certified payroll reports are imperative to ensure compliance. Compliance with regulations, like union requirements, adds another layer of complexity to payroll management.
- Enhanced compliance measures: Government contracts entail heightened levels of recordkeeping and reporting. Compliance officers are increasingly vigilant, imposing fines for non-compliance, necessitating meticulous payroll administration.
Given these challenges, payroll administration in construction becomes intricate. A transparent and accurate payroll process is indispensable to manage government contracts, union obligations, and private projects efficiently. Access to real-time data on time, attendance, and labor costs is crucial for project management, mitigating risks posed by absences and unforeseen wage expenses.
Moreover, leveraging applicable tax credits, such as the Research and Development Credit and Work Opportunity Tax Credit, can significantly benefit construction firms. A robust payroll solution should facilitate easy access to the data necessary for calculating tax credits and ensuring compliance.
Despite the complex nature of the field, by leveraging specialized tools and systems, you can navigate challenges effectively and capitalize on growth opportunities in this dynamic landscape. Contact the team at Baldwin CPAs today for assistance selecting the systems that best fit your organization, or for more information on the various credits available.
