Verifying the accuracy of the certified payroll reports that you can generate from QuickBooks Premier and Enterprise versions – IF you also subscribe to Enhanced Payroll, is a must for anyone in the construction industry.
I’ve been watching the posts on the Intuit Community Forums about the alternate, substitute U.S. Department of Labor WH-347 certified payroll reports that can be generated if you have QuickBooks Premier or Enterprise AND an Enhanced Payroll Subscription. It seems like many people want to know how to generate the reports, if the reports are approved through the DOL (Department of Labor), why they have suddenly stopped working, how to issue “No Work Performed Reports”, and how to tell if the reports they are generating are accurate.
This article will focus on the requirements of the U.S. Department of Labor form WH-347 and how you can check to verify whether or not the reports from QuickBooks are accurate BEFORE you submit them – so that you will be paid in a timely fashion; we’ll be focusing on:
- Section 4 – Day & Date – Hours Worked Each Day
- Column 5 – Total Hours
- Column 6 – Rate of Pay
- Column 7 – Gross Amount Earned
- Section 8 – Deductions, and
- Column 9 – Net Wages Paid for Week
Columns 1-3 are pretty straight forward and each row of information relates to a single employee and a single Work/Trade Classification.
Section 4 – Day & Date – Hours Worked Each Day
In this section you are to report by day and date the number of hours (straight time and overtime) a specific employee worked, under a specific Work/Trade Classification on the job that you are generating the report for.
Column 5 – Total Hours
The total number of Straight and Overtime hours that the employee worked (for a specific Work/Trade Classification) for the week in question.
*Column 6 – Rate of Pay INCLUDING Cash Fringe Benefits
In the “straight time” box for each worker, list the actual hourly rate paid for straight time worked, PLUS cash paid in lieu of fringe benefits paid. When recording the straight time hourly rate, any cash paid in lieu of fringe benefits may be shown separately from the basic rate. For example, “$12.00/.40″ would reflect a $12.00 base hourly rate plus $0.40 for fringe benefits. When overtime is worked, show the overtime hourly rate paid plus any cash in lieu of fringe benefits paid in the “overtime” box for each worked or “$18.00/.40″. This is one of the biggest faults of the certified payroll report generated by QuickBooks – if you pay the fringe benefit rate in cash to the employee as part of his/her hourly rate of pay you MUST manually update this information each week.
Column 7 – Gross Amount Earned this Job and ALL Jobs
Enter gross amount earned on this project. If part of a worker’s weekly wage was earned on projects other than the project described on this payroll, enter in column 7 first the amount earned on the Federal or Federally assisted project and then the gross amount earned during the week on all projects, thus “$163.00/$420.00″ would reflect the earnings of a worker who earned $163.00 on a Federally assisted construction project during a week in which $420.00 was earned on all work. These amounts can easily be verified by looking at the Employee’s Paycheck Detail in QuickBooks.
Section 8 – Deductions
Five columns are provided for showing deductions made from the employee’s paycheck. If more than five deduction are involved, use the first four columns and show the balance deductions under “Other” column; show actual total under “Total Deductions” column; and in the attachment to the payroll describe the deduction(s) contained in the “Other” column. All deductions must be in accordance with the provisions of the Copeland Act Regulations, 29 C.F.R., Part 3. If an individual worked on other jobs in addition to this project, show actual deductions from his/her weekly gross wage, and indicate that deductions are based on his gross wages. These amounts can easily be verified by looking at the employee’s Paycheck Detail in QuickBooks. Remember, ONLY deductions from the employee’s paycheck are to be reported here – Federal Withholding, State Withholding, the Employee portion of FICA and Medicare, Child Support, Wage Garnishments, etc.
Column 9 – Net Wages Paid
This amount should equal the employee’s NET paycheck for the week and should match exactly the amount of his/her paycheck.
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If your final QuickBooks certified payroll report doesn’t look like this wh347, it’s time to opt for a more accurate and less time-consuming option that will truly automate the process for you.
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Many people generate the QuickBooks Certified Payroll report and either manually make changes in it while it is still in Excel, prior to printing the report OR they will print the report and then use it as a guideline for manually completing the actual “fillable report” from the U.S. Department of Labor Website – which is a highly error prone and time-consuming process.
Additionally, QuickBooks does not have the ability to generate a “No Work” performed payroll, so if you need one, and it’s likely that you will, you’ll need to manually complete one of these also using the fillable form from the DOL website.
Manual entry of the same information multiple times in multiple places is a huge waste of time and let’s face it, every time that you have to enter the same information in yet another place the higher the risk of transposition errors which result in rejected reports and delayed payment.
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*Fringe Benefits that are paid to a Union or a bona-fide plan are NOT displayed on the report and the Straight time rate would be displayed as $12.00 and the Overtime rate as $18.00 in the Rate of Pay Column. The certified payroll report generated by QuickBooks inaccurately displays any fringes paid to a Union or bona-fide plan and you MUST manually correct this each week.
We hope you have found this article helpful, if so please leave us a comment.
From Construction Business Owner.com
– written by Russ Roy – February 2oo9 edition
Note from Nancy Smyth: Monte TenEyek, the consultant noted in this article, obviously didn’t do his homework regarding QuickBooks. QuickBooks Pro/Premier has the ability to handle 25 active payroll wage items per employee and the Enterprise Solutions version can handle 100 per employee. If you add QuickBooks Enhanced Payroll you can track worker’s compensation.
Read our own article on “Making the Move to Public Works Construction” from our December 2008 QuickBooks for Contractors Newsletter, by clicking here.
With the burst housing bubble and tighter private financing guidelines, more and more contractors are considering public works projects as a new source of revenue. On the surface, this seems like a great idea. Talks of a possible federal stimulus package aimed at public works and infrastructure development means there could soon be more government work to go around.
But making the shift to prevailing wage jobs takes preparation. Without proper planning, contractors run the risk of underbidding jobs-and, subsequently, losing money-or getting slapped with steep penalties for improper recording keeping. Establishing protocols for certified payroll and AIA progress billings and having solid audit trails for each transaction are vital if you want to succeed in the government-financed construction market.
There are many things you can do to prepare your company for a shift to government work. Following, three key steps are outlined to prepare your company for prevailing wage work. By following these initial first steps, and building on them as you grow your public works portfolio, you will position your company to not only survive the current economic downturn, but thrive when the market conditions improve.
Step No. 1: Get Educated
The first thing you should do is get educated about prevailing wage law. Find out what payroll, accounting and reporting requirements are necessary to meet state and federal regulations. Most states have some information posted on their website, which is a great place to start. But taking a class or workshop from your local industry association or CPA may provide more detailed how-to information.
Don’t be hesitate to hire a consultant to show you the ropes. An up-front consulting investment will often deliver a high return on investment by shortening the learning curve and saving you money down the road. A financial services firm with construction experience, for instance, can assist you in establishing things like a bona-fide fringe benefits program that lowers your taxable employee wages. This can help you control cash flow, lower your bid rate and increase your profit margin.
Your accounting software vendor can also provide a wealth of knowledge and experience around meeting your prevailing wage requirements and should be an integral part of your public works transition team. If the products (or support professionals) can’t address your questions, it’s probably time to upgrade to a more complete, construction-specific solution.
Step No. 2: Automate Your Accounting Processes
Managing prevailing wage jobs using generic accounting software and spreadsheets requires multiple data entry that is both time-consuming and at-risk for human error. “Programs like QuickBooks may be adequate when contractors have a single pay rate and no need for actual labor burden, but if you want to compete for prevailing wage work, you’ll need a more robust accounting program,” said financial consultant, Monte TenEyek. “When you perform public works projects you need to have payroll software that supports multi-rate capabilities and different worker’s compensation rates for different jobs.”
Veronica Calderon, office manager for Ro’s Precise Painting, a commercial painting contractor in California, knows first-hand how challenging it is to stay in compliance without the right software tools. “This seems crazy now,” said Calderon, “but our old software couldn’t handle multiple pay rates. For each employee we would cut a separate paycheck for each job so that our certified payroll report would be accurate. One employee might get five or six paychecks each pay period!”
After upgrading to software with strong certified payroll tools, Calderon couldn’t believe the difference. “We were in shock because certified payroll reporting was so easy and accurate. Plus, we gained checks and balances that keep us from making mistakes. Having the right software makes a world of difference when you’re doing government work.”
TenEyck couldn’t agree more. “Make the decision to put procedures in place before going after prevailing wage work,” he recommends. “If you get solid advice up front, and have construction-specific software in place to automate prevailing wage processes and establish compliance consistency, you’ll have the peace of mind to focus on securing government work.”
Step No. 3: Bid on Projects Based on Your Strengths
On public works projects, the job is awarded to the lowest qualified bidder. And the competition can be tough. Bid too low and you might win the work-but bankrupt your business. Bid too high and you’re wasting your time. “It’s not uncommon to see twenty or thirty contractors bidding on the same public works job,” says TenEyck, “and according to contractors I’ve talked to, they estimate that it costs them $3,000 to bid on a single job.”
Since every contractor bidding on a prevailing wage job has to pay their employees the same rate of pay, the wage itself can’t be your competitive edge. Because of this, it makes sense to identify your strengths before going after projects. What types of projects do you excel at? What’s more, which of your crews perform the fastest? When making the shift to government work, identify the projects that, based on your strengths, will most likely put you in the lowest bidder spot while still turning a profit.
Moving Forward: Cultivating Relationships
After getting educated, automating your accounting processes and modifying your bidding process based on your strengths, you should have a solid foundation for making the shift to public works projects. The next thing you should focus on is building relationships with the people in charge of awarding you jobs.
“Unanswered questions are a barrier to public works projects,” states TenEyck. “If you have lingering questions about a job, you’re probably not going to submit a bid.” Getting to know the director of facilities management at your local university, for example, can be very advantageous. Not only will you have an “in” to discover what work is coming up, but you’ll have a specific contact to call if you have questions about the bidding process.
In the competitive world of public works construction, prevailing wage planning isn’t an option-it’s a necessity. Even if you already perform government work, it’s not a bad idea to revisit your software solution and processes, and consult with a financial planner to modify your fringe benefits structure to take advantage of every possible tax incentive.
With all of the enhancements (new features, forms, functionality) that we’ve made to Certified Payroll Solution in the last 1/2 years – not to mention the release of the new Federal WH-347 Certified payroll report and reporting requirements…..I decided it was time to get off my duff and update some of our training videos.
After nearly 4 days of screen capture, audio recording, and editing I’m happy to announce that two of the video’s (totally a little over 1 hour of viewing time) are now available in the Certified Payroll Solution Training, Support & Resource Center – in the Free Training Category.
The video’s that have been updated are the “Certified Payroll Solution Initial Setup Video” and the “Running Certified Payroll Solution Video“.
Updated videos are available in their original Windows Media Player format – because everybody has Windows Media Player installed on their computer.
New Video Format Available:
Table of Contents
We’ve also added a new format for these videos – Flash based with a Table of Contents on the left, so you can easily replay certain sections of the video. The Table of Contents from the Initial Setup Video is shown to the left.
So what do these video’s cover? I’m glad you asked!
The Certified Payroll Solution Initial Setup Video covers entering your Certified Payroll Solution License, granting permission in QuickBooks for CPS to access and read information from your QuickBooks Company file, setting up certified payroll reporting preferences, that are specific to your company, that QuickBooks has no means of handling as well as setting up “default” employee and job information.
The Running Certified Payroll Solution Video covers running your first set of certified payroll reports (start to finish), offers a review of granting permission in QuickBooks for CPS to access and read information from your QuickBooks company file, walks you through the one-time setup of linked records (back to QuickBooks) for employees, jobs, payroll wage items and deductions – explaining and demonstrating the various pieces of information that QuickBooks has no mechanism of holding. Lastly it covers previewing, printing and troubleshooting your first set of certified payroll reports.
We will be adding Flash videos for the remaining two videos here shortly – those videos are the Certified Payroll Solution Download and Installation Video and the Certified Payroll Solution – QuickBooks Setup Video.
I’d welcome any feedback about the videos that you might have.
Nancy
