Construction companies have had a difficult few years, with COVID-19 closing building sites across the globe. But many experts are predicting that construction will come back strong, playing a vital role in our post-pandemic recovery. Construction companies – even solopreneur or small business companies – should be positioned for growth in 2021 and beyond, and payroll administration is an important piece of the puzzle.
For those who are just getting started, you can build a construction company in a few easy steps.
First, you’ll need to make the important decision of whether you’re going to register as an LLC or a corporation. The main difference between an LLC and a corporation is that an LLC is owned by one person or a few people, and a corporation is owned by its shareholders. You should seek outside guidance on your choice, but the ultimate decision will be up to you and any partners with whom you’re starting the business.
Next, you’ll need an Employer Identification Number (EIN) in order to be able to hire people. You can apply online.
Third, if you’ve decided to form a corporation rather than an LLC you may need to file form 2553 with the IRS.
As a final step, you should research what state and local agencies require you to register with them. At the state level, you can find the requirements through a single database. You’ll need to research local agencies yourself.
Many construction companies make the decision to keep payroll as an internal process, even though it’s often a more complicated process than in many other industries.
While many companies in other industries have a clearly defined and repeatable payroll schedule paying out the same amounts according to that regular schedule, a construction company’s payroll can change drastically over the course of a project. Initial payroll needs when a new project starts will likely differ drastically week to week as the project progresses, with greater and fewer contractors joining the team based on the current scope of the project.
This variation can create a range of administrative headaches for smaller construction firms in particular. It can be difficult to plan for payroll fluctuations, which can negatively impact the company’s cash flow.
Roll by ADP allows you to make immediate changes to payroll, hours and even who is on your payroll –all from your phone. This means you can manage payroll from the site, from your truck, or any other time a project timeline changes.
Lots of smaller construction companies outsource payroll altogether, allowing them to separate operational expenses from payroll and also focus on their core business.
But Roll by ADP lets you easily run payroll yourself in under a minute and handles tax filing too.
Roll makes it simple to add or remove people from your payroll at any time and give one-time payments, which is perfect for when you need to bring on a 1099 contractor for a temporary job or when project schedules change – which they so often do.
However your construction company grows, not having to spend a lot of time thinking about and worrying about running payroll will mean you have more time to help keep your construction firm focused on what it does best.
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