Robert McManus - Conquering Payroll Challenges - PODCAST TRANSCRIPT

Editor's note: The following is the transcript of a live interview with Robert McManus of Mid-South Roof Systems. You can read the interview below or listen to the podcast.

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Heidi Ellsworth: Hello and welcome to another Roofing Road Trips from RoofersCoffeeShop. My name is Heidi Ellsworth, and today we are here to talk about conquering payroll challenges. I have to tell you, as a small business owner, ugh, it's hard. Payroll is hard. And especially in construction, can't even imagine. So we brought in an expert in this and that is Robert McManus with Mid-South Roof Systems, who's really been working to make this happen with technology. So Robert, welcome to the show.

Robert McManus: Thank you.

Heidi Ellsworth: So happy to have you here. I'm really excited to hear what you have to say, because as you hear, payroll is always a challenge. So let's start with your introduction first. Tell us a little bit about you and your company.

Robert McManus: Okay, yeah. So I'm the CFO here, and Mid-South Roof Systems was started around 1990, commercial roofing only. I was the outside CPA with a CPA firm and Mid-South was a client and kept growing and growing and growing. And anyway, it ended up being one of those lunches with the owner. You really need to hire somebody that knows debits and credits and other things. And there was my gateway to get out of public accounting.

Heidi Ellsworth: I love it. I love it.

Robert McManus: So that was about 25 years ago, and Mid-South has continued to grow. We already had FOUNDATION as our accounting platform, ERP, if you will. We were actually on the DOS version, if you can believe it, back then, 25 years ago.

Heidi Ellsworth: I can. I was there.

Robert McManus: Not long after I was here, we went to the Windows version. And we were doing payroll in-house. We had a lady here that had payroll experience, and she did a lot of the legwork on that as far as the payroll, tax return filings and that type of thing. And I had experience from public accounting dealing with that. And so anyway, years down the road, we found out about Payroll4Construction.

Even though I had experience and we had a person here that had experience, it was time-consuming and laborious and we were doing paper time cards and all the different government filings. We'd mess up every once in a while and penalties get really severe with that. So we tried outsourcing it to a conventional payroll service. I won't name any names, but it didn't work at all.

I see from CFMA Cafe Chats and everything that outsourcing the conventional payroll service still entails getting all your payroll information to them, them doing their thing with it and then trying to import things back in. And the beauty with Payroll4Construction was that because they were linked to FOUNDATION, they're really a FOUNDATION company, when we get done with everything, we just click a couple of buttons and they grab everything and take it from there. And it's pretty much done and all the government filings are done. It was life changing when that happened.

Heidi Ellsworth: I bet. I bet. Wow! And so how did you find FOUNDATION and payroll? As you were looking through that, how did you find them and really look at making that change? Because like you said, bringing technology on is not always easy. So what was that journey for you?

Robert McManus: Well, I was interested in it, of course, to get out of that grind, if you will, of doing the payroll in-house. In FOUNDATION, we were a customer, so it was probably a sales pitch and them reaching out to us and we got a demo and that type of thing. And I was like, "Yeah, let's try it." And it's been great ever since. Haven't looked back at all.

Heidi Ellsworth: Well, for everyone listening out there in roofing, I think a lot of companies are familiar with Estimating Edge that has been doing estimating 30 plus years in the industry. And Estimating Edge is part of the umbrella of FOUNDATION, which is a leading software company and part of that is Payroll4Construction that roofing companies are just finding, Robert. I mean, I think GCs, general contractors and some other trades may have been. But when I was at the conference this last year, I saw a lot of roofing companies that are like, "This works for us."

Robert McManus: Okay, I'll walk on over to our estimators after this.

Heidi Ellsworth: Yeah, yeah, yeah. Talk to them about Estimating Edge. That's another great one. FOUNDATION just has such a suite of software that really helps construction overall. But getting back a little bit to the payroll system, would love to talk about you're multi-state, multi-service commercial roofing contractor with several divisions, how does that working through the complications of different states, different divisions, everything?

Robert McManus: Right. Well, we're mainly located in Georgia, but we do have remote workers in some other states and so we get that set up within FOUNDATION and correspond with Payroll4Construction on that. Typically, if we are going to be in a state where we're going to have payroll obligations, we'll have to get our own IDs for unemployment and state withholding and then we just send that on with... If it's a log into the state portal, then we give them our log in and Payroll4Construction takes it from there as far as processing the state obligations there.

Heidi Ellsworth: And you mentioned this a little bit when you used to have timecards and you had redundancy and all those kind of things, how has Payroll4Construction really helped you with errors, delays, time tracking, compliance, all that kind of stuff?

Robert McManus: You talked about their suite of products, and we went from paper timecards and I can't remember what the predecessor name was, but it's WorkMax now. We use WorkMax for our remote timecard entry. And of course, that's a heck of a lot better than guys out on a job site four states away having to get a paper time card and, I don't know, take a picture of it on their phone and text it to our payroll administrator.

And we still have a payroll administrator who handles all of that, the WorkMax part of it, the time card and processing that and importing it from WorkMax into FOUNDATION. And it seems to work great. I don't have to get involved with that luckily too much.

Heidi Ellsworth: That's good.

Robert McManus: I just get the okay from our payroll clerk that everything's in, you're ready to go. I check things over a little bit. And like we talked about earlier, click a few buttons and payroll is on its way.

Heidi Ellsworth: That is great. And you use FOUNDATION for your overall?

Robert McManus: Yes.

Heidi Ellsworth: Finances. Yes. And so really it all works together.

Robert McManus: Yeah, yeah, it's amazing. I really don't know how it would work, Payroll4Construction, if you weren't a FOUNDATION client to begin with. I guess they do it. I really don't know.

Heidi Ellsworth: That's why you should get those demos, right?

Robert McManus: Right.

Heidi Ellsworth: I love it. You were talking about WorkMax and so that's a lot on the phones, mobile. How is mobile working with your Payroll4Construction and your overall program with your workers?

Robert McManus: Are you talking about the WorkMax with the mobile?

Heidi Ellsworth: Yeah.

Robert McManus: Okay. The guys, we have a foreman on a crew and they're responsible for clocking guys in and out of the job at the end of the day and possibly different modes for drive time and ride time and that type of thing. It seems to work just great. Anything is subject to errors if you put garbage in it. Superintendents are supposed to be checking the time on the crews under their watch before it goes all the way out the door.

Heidi Ellsworth: That makes sense. Are you using any of the mobile availability with the payroll? How does that...

Robert McManus: Oh, well, yeah, I would say that anybody we... This is not necessarily Payroll4Construction I think, but it's part of FOUNDATION. It's called eAccess. And so any employee can check on their phone or their device their pay stubs. And believe me, as soon as we process payroll, folks are checking their hours and looking at their pay stubs and everything. And so it's right there as soon as payroll is processed and not actually to the pay date.

So we process payroll on Wednesday with a Friday pay date and folks are checking their time, their pay stubs as soon as it's... They know maybe late Wednesday morning it should be accessible. But that's a FOUNDATION product as well whether you're using Payroll4Construction, I believe. That's probably the other major mobile thing that folks can use, our employees.

Heidi Ellsworth: I think that's important for that convenience and to be able to really offer that to your employees. That's such a benefit. Going back to what you said is as you went from paper to automation to technology, talk to me a little bit about what that did for your accounting department, for the business overall. What kind of ROI did you see from making that change?

Robert McManus: Well, I think the biggest thing ROI wise was freeing up time for myself and the lady we had in here that's since retired and she had payroll tax return experience. But once she retired, we didn't have anybody besides me and I didn't want to do it. So that's probably the biggest thing is the time on a weekly basis. It's been a number of years.

I don't recall exactly, but I would say for me for sure on average, because it would fluctuate if you were having to actually do payroll tax returns at the end of a month or a quarter, but on average, I'd say five to 10 hours a week. And probably more so than that was just the miscues that you had doing it in-house on some payroll tax filings and the penalties that would get substantial real quick.

An example comes to mind that if a federal tax deposit of payroll tax returns has to be made so many days after the end of a payroll run, and if the payroll runs the same, it's not hard to keep up with that deadline. But if you have a fluctuation or a bonus payroll run, you might have to really be doing the payroll tax return, the federal payroll tax deposit the same day as the payroll.

And if you miss that and do it like two days later, then the penalties can be substantial. Just an example of... We don't have that anymore. We don't have to worry about any kind of payroll tax return penalties. It's hard to say right now after this many years down the road what we've saved in payroll tax penalties, but it's a real thing for sure.

Heidi Ellsworth: Wow! Now, okay, so along that lines, every state and you said you have some remote workers. You're in a couple of different states. I know we are. At RoofersCoffeeShop, we have people all over the country. But how does it help with labor laws and regulations in those different states?

Robert McManus: So Payroll4Construction, once we're registered and we submit our payroll, it's really up... The burden does fall back to us to make sure that we're recording in FOUNDATION, the various states and our obligations. That's probably something I'm still kind of involved with, whether we're going to actually be remitting payroll for a temporary location in a state, a job. And that's state by state.

And I wish there was more uniformity there, but there isn't. So whether we actually enroll in a state for a job that we're going to be in and out of there in 45 days, it's still on me making that call on that and looking at the regulations on that state on temporary work in an area. I won't say that Payroll4Construction is going to relieve us or anybody from having to make that determination themselves.

But if you do make that determination and get registered and do everything, then Payroll4Construction will handle all your obligations. Right.

Heidi Ellsworth: Wow, that's awesome. So if you're talking to some advice since you've been down this road for a while now and you're talking to either small new contractors or maybe contractors who are looking for different solutions, what's some of your advice about getting the right financial and payroll software and technology?

Robert McManus: I would probably say don't go it alone, unless you really just got a lot of time and feel like you're an expert in there in that area. It was just one of the things that I had some experience with, but I'm not going to say... It's almost hard to believe that anybody would be versed in all 50 states and localities' tax obligations payroll wise. So I guess I would sum it down to that, don't go it alone.

Even though you may have a good accounting platform that could allow you to do a lot of the payroll related stuff in-house, I highly encourage anybody to use a payroll service. But it's tough when you add the dimension of construction contractors that do job costing. It's not just, here's our payroll this week. You got to have it all integrated into your job costs system.

So that's the tricky part of it for a construction contractor using an outside service is to have an outside payroll service that can integrate things seamlessly back into your job cost. And you've got that when you're talking about FOUNDATION and Payroll4Construction. There's no importing or anything like that from the service. It's all done. As soon as you click the button for payroll, it's hitting job cost and everything else.

Heidi Ellsworth: So you mentioned earlier as we were talking about how the demos really helped you. I mean, I know a lot of times people nowadays are like, "Ugh, I don't want to do a demo," but how important is that as you're making this decision?

Robert McManus: I think it's pretty important. It can show you how it looks. And I would still probably try to get a couple of references to call. It's been a while. I don't remember whether I did or whether I was so excited and just went ahead and jumped in and tried it.
Heidi Ellsworth: I love it.

Robert McManus: But a couple of references is what I usually try to do before I go into an outside service for what it's worth. Kind of lost track there. Did I answer your question?

Heidi Ellsworth: Yes, you did. You did. You did. You did perfect. And I guess my last question is just when you're looking at that, the full suite of the technology with FOUNDATION and Payroll4Construction and WorkMax and all of those kinds of things and I know you can't put this down just in dollars, but what kind of value does that bring to a roofing company overall, just for the overall culture, the overall success of a company? How important is that technology to be in place?

Robert McManus: Ah, man, I think it's very valuable because it frees up time for our accounting and possibly other departments, project management to spend more time on things that are going to make the company money or save money versus just a compliance thing altogether. So I think that's probably the key there is freeing up time for activities that hopefully make money or save money versus just compliance.

Heidi Ellsworth: That's great. Robert, thank you so much for sharing your story with us today. This is just so cool. Thank you.

Robert McManus: Okay, thank you.

Heidi Ellsworth: Thank you. And everyone, please, you can find all this information on RoofersCoffeeShop in the FOUNDATION, the Payroll4Construction or the WorkMax directories. Also, don't forget about Estimating Edge out there. You can find all of these software solutions under the large FOUNDATION umbrella.

We were at their conference last year. We are continuing these conversations with contractors who are using it day-to-day to bring you some experience and advice to help with what you're doing on the technology front. So Robert, once again, thank you so much.

Robert McManus: Thank you.

Heidi Ellsworth: Thank you, and thank you everyone for listening. Please check out all of our podcasts under our read, listen, watch section of the navigation. Look for Roofing Road Trips on your favorite podcast channel. Be sure to subscribe and set those notifications so you don't miss a single episode. We'll be seeing you next time on Roofing Road Trips.

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