Business insights and growth highlights

No Delayed Payments For The Construction Industry: How to Achieve That

Sep 27, 2022 by Morris Reichman
fast payroll

Residential and commercial construction projects are what you do, and you do them well. One of the reasons that the business has grown over the years is that you know how to ensure everything is done on time. That includes ensuring that the payroll is never late. 

At times, meeting payroll can be difficult. One strategy that you can use to overcome any temporary obstacles is to make use of business payroll loans supplied by Payro. Here are some examples of what may interfere with meeting a payroll, and how financing through Payro can do quite a bit for your construction business.

Challenges That Can Undermine the Ability to Make a Payroll

There’s more than one reason why meeting an upcoming payroll may be more difficult than before. One of the most common has to do with the aging of current customer accounts. Simply put, there’s a large outstanding balance on a couple of accounts that normally pay in less than 45 days. Unfortunately, that mark has passed, and it looks like it will be closer to 60 days before the invoices are paid. 

This leaves your company temporarily strapped for cash. While the money is on the way, the next payroll will come and go before the cash is in hand. You will need to find a way to meet the payroll and ensure all of your employees are paid. 

Another issue that may impact the ability is unanticipated expenses with construction projects. Due to factors that were not apparent at first, it will take more resources to complete those projects on time. Somehow, you need to find a way to secure those resources and continue to make payroll. Some sort of financing to cover the latter will make it easier to take care of the former. 

Timely Payrolls And The Ability to Keep Employees

There’s no shortage of reasons why meeting payroll must be a priority. A key reason has to do with having enough employees to cover all the projects that are currently in the works. Without adequate staffing at the construction sites and in your administrative office, tasks will be left undone.

As much as your employees enjoy working there, they aren’t working just to fill spare time. The point of working is to earn a living that allows them to pay their bills. If they can’t depend on you to ensure they have a fast payroll every time, they’ll start looking for work elsewhere. Once they leave, getting them back will be no easy task. It’s in your best interests to keep your employees and ensure they have a good reason to stick around. 

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Lessen the Need to Constantly Train New Employees

It’s one thing to hire and train new employees because the business is expanding. The situation is different when you’re replacing valued employees because they weren’t being paid on time. What you have basically accomplished is losing important assets and now have to bring in new people who must be trained. Even with training, it will take time before they offer the same level of proficiency that the former employees provided. 

Training also costs money. If you’re already having difficulty covering payroll, where will the cash come from to beef up the training and accommodate the influx of new employees? You would do well to set up a plan for payroll financing and hang on to the employees who are already doing such good work for you. 

Maintaining Higher Morale

Nothing can cause morale to tank in the workplace like a failure to be fairly compensated on time. Employees will often tolerate a number of minor issues when they know payroll will be on time every time. When they no longer have any faith in being paid when it’s expected, their desire to do the best jobs that they can suffer. 

It may not manifest in any overt way, but it won’t be long until you notice that projects don’t seem to progress as quickly as before. Employees may be less concerned with making sure the little details that go into quality construction are managed properly. Some may not take as much pride in where they work as before. Once this type of thing begins, it will be some time before you recapture trust and people actually enjoy working for you again.

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No Legal Issues Related to The Violation of Employment Laws

There are legal aspects that may come into play as well. Employment laws at federal, state, and local levels generally favor employers paying employees on time. A repeated failure to do so can create a number of issues that the typical construction company owner would rather avoid. 

Violations will involve allocating cash for fines, legal fees, and other expenses that you don’t need on top of having difficulty coming up with payroll cash. A better solution is to never let things get this far. With financing through Payro, you can meet payroll and remain in the good graces of the agencies that ensure employers remain in compliance with all employment laws. 

Your Reputation in the Business Community

If you think that missing payroll is something that remains between you and your employees, think again. It won’t be long before the word begins to get out. When it does, your standing in the business community may be adversely affected. 

How do others find out about the delayed payroll? At times, employees may need to provide an explanation of why they are not paying some of their obligations on time. It can also be as casual as employee families choosing to not participate in some events because they’re temporarily strapped for cash. As word gets out, others may begin to wonder how stable your business happens to be.

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Anticipating Payroll Needs

While Payro offers a quick turnaround on financing, it’s a good idea to keep a tight grip on what sort of help you may need to meet the next couple of payroll periods. That means understanding how the aging of your receivables is going. When you have any reason to think that a certain percentage of those outstanding invoices will not be paid on time, a proactive approach to obtaining payroll financing is a smart move. 

Doing so means that the money will be on hand before it’s time to begin working on the next payroll. Think of how that takes the pressure off and makes it easier to focus on other matters that need your attention. In the meantime, if more payments come in than you projected, your position is even better. When things play out the way you expected, then your employees still get paid on time. 

While the cash crunch may be short-term, the damage to the company’s reputation can linger much longer. Opting to contact Payro and set up a plan for payroll financing protects your reputation even as it helps your employees to avoid the necessity of uncomfortable discussions with their creditors.

Meeting Project Deadlines

Remember how late payrolls could have a negative impact on employee morale? If the impact was significant enough to slow down work on current projects, the outcome could be missed deadlines. If your business is known for providing some sort of discount when projects run past deadlines, the inability to meet payroll just affected your future revenue. 

That’s not the way things have to be. Financing payroll will meet the immediate need, but this action also prevents a reduction in your future earnings. It also helps with protecting your reputation, since your employees are likely to keep working diligently and ensure that no deadlines are missed. You can bet that people notice when companies live up to their customer commitments. 

Contacting Payro and setting up a plan for payroll financing means that morale remains high, tasks get done, and projects are completed on time. Your customers are happy, payments are remitted according to the terms agreed upon, and your revenue stream does not suffer. Everyone wins in this scenario.

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Making the Company Stronger Year to Year

You’ve worked hard to build the business into a solid operation. The process is not over yet. While the company is now one of the best construction businesses in the area, the goal is to become the best. To do that, you must ensure that the company always meets its obligations. 

When it comes to taking care of your employees, the use of Payro payroll funding positions the business to continue growing from one year to the next. It’s easier to build on the successes of the past when so many people remain with you as those years pass. See making use of this resource for payroll funding as a way to retain the collective experience and expertise that’s needed to keep the company strong and growing from now on. 

The bottom line is that delaying payments to employees is the last thing that you want to do. Even if things are a little tight right this minute, you can depend on payroll financing through Payro to help. Contact Payro today and talk with an expert. The money you need could be in your bank account in as little as two business days.

Morris Reichman

hello@payrofinance.com

Morris Reichman is the founder and CEO of Payro Finance. Former Vice President at Infinity Capital Funding an alternative finance company, Morris possesses a versatile background in the finance industry. Having spent 7+ years working across global macro operations and start up corporate finance Morris's expertise is in business accounting, risk management and investment analysis. Morris founded Payro Finance to support business owners and ensure their business continuity.