Beeco Building Contracting, Inc. had an inefficient payroll process.
The company's employees get paid weekly. Employees submit their
hours to the accountant on Thursdays. The accountant then calculates
taxes withheld on a small calculator using tax tables. Then the checks
are written out by hand. This process takes about two hours. The end
of the year tax preparation had to be completed by an outside auditor.
This was costly and inefficient.
Upon analyzing the accounting process of Beeco Building Construction,
Incorporated, the Future CEO's began searching for computer software
that would be capable of improving this process. It was jointly
decided that Beeco use the "Contractor III" software package. Beeco
Building is using the Construction III Lite, which is designed for
small contractors. The Construction III Payroll handles all of the
varied complexities of construction payroll. Overhead allocation to
jobs, government reporting, taxes, worker's compensation and variable
pay rates among employees are all made easier with this program. After
receiving the software package, we immediately began to install it.
Members of the group completed the tutorial first, and then we met
with one of the partners of Beeco to introduce him to the payroll
option of the software. After he felt comfortable with this option,
we began to set up the databases for the company and each employee to
improve the efficiency and timeliness of this process.
We chose the task of improving the accounting process of Beeco Building
Contractors, Incorporated. Because a large portion of their paper work
including payroll, accounts receivable and accounts payable was kept on
a yellow legal pad or in a logbook in the back of one of the work
trucks, we felt they needed a system of accuracy in the upkeeping of
the accounting process. The most reasonable and realistic solution
that was mutually decided upon by the Future CEO's and Beeco Building
was the installation of Construction III. With the new software, the
new payroll process became easier and more efficient. The only
information that needs to be entered into the computer are the employees'
hours, and all calculations are then done by the computer software
package. The first time the new software was used, the payroll process
took approximately three hours. The accountant, however, was not
familiar with the package and was still in the learning stage. After
the first week, the payroll process was shortened to thirty minutes.
At this time, we cannot calculate how the end of the year payroll
process will improve, but we can predict the amount of time needed to
complete the year end payroll will decrease significantly. Beeco
Building Contractors, Incorporated is very pleased with the results of
automating their payroll and look forward to automating the entire
accounting process in the future.
For “Future CEO’s” (Group 5) process improvement project, we chose to improve the accounting process of Beeco Building Contractors, Inc., concentrating on their payroll department. This company employs about fifty people. Annually, they build around forty houses, two churches, and eight swimming pools. Beeco Building is located in Jefferson, a small, rural town in Northeast Georgia. Recently, the company acquired a computer and showed interest in automating the business, especially the payroll process. However, the two owners did not have any knowledge in how to adopt the changes needed for their business.
Currently, all paper work including payroll, accounts receivable, and accounts payable is kept on a yellow legal pad or in a logbook in the back of one of the work trucks. This method may seem acceptable to many but several problems can arise: accidentally throwing the legal pad away or even the truck catching on fire. To check past records, one would have to dig through a box in search of the correct legal pad or logbook. Building houses is what this company is good at, not keeping the paper work in order.
First, we began searching for computer software that would be capable of improving the accounting process for Beeco Building. We found many packages that would automate the payroll department. After discussing the packages with the company, they asked us to pick a package that would do payroll but that would also be able to automate the other parts of the company in the future. Our group felt that finding a software package to do all of this would be beneficiary. However, we would start the technological process with the payroll and allow the company to completely automate when they were ready.
We decided to use the Contractor III software package. This package offers software for home builders and multi-million dollar developers. There are three levels of software: Lite, Standard, and Plus. The appropriate level is determined by how many employees, annual sales, type of construction, etc. Beeco Building is using the Contractor Lite which is designed for small contractors. It has built in job costing features and up to eighteen fiscal periods requiring no month-end closing. All job cost entries come from invoices and time sheets in Accounts Payable and Receivable and Payroll. Although Beeco Building is primarily concerned with payroll, in the future they will be able to use some of the other features offered by the Contractor III Lite software package.
We were impressed with some of the other features that the software package included. A-Systems Corporation provides technical support for the entire Contractor III via a toll-free support hotline. They offer unlimited access, at no charge from 8-5, Mountain time, on Monday through Friday. This is 10-7 Eastern Standard Time. This enables Beeco Construction to use the help line later into the evening. Contractor III offers many materials used with their software. We decided to purchase dual purpose checks for payroll and accounts payable. Also, there is a password protection to limit access throughout the system. The multi-use capability keeps track of who is in the accounting system at all times and can limit access to programs when conflicts are anticipated within the company.
The Contractor III Payroll handles all of the varied complexities of construction payroll. Overhead allocation to jobs, government reporting, unions, taxes, multi-state, worker’s compensation, and variable pay rates among employees are all made easier with this program. It handles hourly, salaried, and commission pay types. The details of each check paid to each employee are maintained for the year. This program includes an auditing report system; reports are available by job or by employee. It can handle state, federal, and local taxes. Also, there is an unlimited number of one-time deductions plus twelve repeating deductions. Once the timesheet information in entered, the computer distributes all costs to the assigned job phases or general ledger accounts. Taxes, accruals, union fringes, and deductions will be calculated. The overhead is distributed proportionately over the job phases or accumulated in a single account on the job or in the general ledger. Any union information is then sent to the union’s files and employee records are updated.
Money was a major concern for our group. We did not want to shock the company by making them spend an enormous amount of money. Contractor III Lite has two basic software packages. The first offers a six hour training session over the phone, along with the software at a cost of $699.99. The second package is without the training, yet it does include a tutorial. This costs only $169.99. We discussed the two packages along with their prices with Beeco Construction. They chose the $169 package because they wanted to take the automation process step by step, beginning with the payroll.
After receiving the software package, we immediately began to install it. Members of the group completed the tutorial first. Then we met with one of the partners of Beeco Construction and together went through the tutorial on payroll. After the tutorial, we began to set up the databases for the company and each employee.
Writing out checks by hand was the original process. This process took approximately two hours. When dealing with this process, all hours must be turned in by the employees on Thursday in order to receive their paychecks on Friday. The payroll process was a burden for the accountant because he had to look up all the tax information on the tax tables. He would then have to make the subtractions needed from each employee’s gross pay. Granted the accountant had begun to memorize the tables, the process was still tedious. The end of the year tax preparation is also a hassle. Since all records are kept in logbooks, the information needed can be difficult to organize.
With the new software the payroll process became easier. All tax information is included in the software; therefore, no tables are needed. The only thing that needs to be entered into the computer are the employees hours. All calculations are then done by the computer software package. The first time the new software was used, the payroll process took approximately three hours. The accountant, however, was not familiar with the package and was still in the learning stage. After the first week, the payroll process was shortened to thirty minutes. At this time, we can not calculate how the end of the year payroll process will improve. But with the software package, reports can be printed with the ease of a mouse click.
Beeco Building Contracting, Inc. is very pleased with the results of automating their payroll and look forward to automating the entire accounting process in the future.
A List of Links
A-Systems Link: Producer of Construction III
Description of Lean Production
Mr. Polito's Homepage