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Certified Payroll
What is Certified Payroll?
Certified Payroll is a specific type of payroll process required for any contractor or subcontractor working on federally funded or assisted construction projects under the Davis-Bacon Act. It is a federal compliance requirement to ensure employees are paid prevailing local wage rates and benefits. Certified Payroll records include the worker's name, their classification, hourly rates of wages paid, daily and weekly hours worked, deductions made, and actual wage paid. It provides transparency for regulators, ensuring fair wages for work conducted. This mandatory weekly submission acts as an assertive step in suppressing wage theft in the construction industry.
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Other construction terms
What is Accounts Receivable (A/R)?
Accounts Receivable (A/R) in the construction industry refers to the amount of money owed to a construction company for goods and services it has provided but has not yet been paid for. This is typically recorded as an asset on the company's balance sheet as it represents a legal obligation for the customer to remit payment to the company. The A/R system helps track these outstanding payments within a set time period, allowing construction companies to manage their cash flow effectively. It's essential for construction firms to monitor their A/R closely, as late or uncollected payments can significantly impact their financial health and ability to fund future projects.
What is a Submittal?
A submittal in the construction industry refers to the documents or materials that contractors present to architects and engineers for approval during the course of a project. The submittal process ensures all products and materials meet the quality and specifications outlined in the contract, helping to maintain standards and avoid costly revisions or errors. These documentations can include shop drawings, material data, samples, and product data. The submittal process is essential to avoid any potential discrepancies or misunderstandings, and it has to be accurately managed to guarantee the project's success.
What is a Surety?
A surety in construction is a company that provides financial guarantees, typically in the form of bonds, to ensure that contractors fulfill their contractual obligations. The surety acts as a third-party guarantor, promising to step in and complete the work or compensate for damages if the contractor fails to meet their commitments.
Sureties issue various types of construction bonds, including bid bonds, performance bonds, and payment bonds. These bonds protect project owners from financial loss and give them confidence that contractors can deliver on their promises. To obtain bonding, contractors must demonstrate financial stability, technical expertise, and a track record of successful project completion.
For subcontractors, working with bonded general contractors provides payment protection, but maintaining your own bonding capacity is equally important for winning larger projects. Sureties evaluate contractors based on several factors, including financial health, project experience, and accounts receivable aging. Since poor A/R management can hurt your bonding capacity and disqualify you from major projects, keeping payments flowing quickly becomes critical for more than just cash flow.
Siteline helps subcontractors maintain healthier A/R aging by streamlining billing processes, providing visibility into payment statuses, and creating automated reminders to stay on top of collections. This all positively impact bonding evaluations and keep more opportunities within reach. Learn more about Siteline.
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