House building, construction, and real estate are very hot right now. With so much competition for construction talent, and ongoing issues with high expenses and fraud, prepaid debit cards can solve several of the industry’s problems. Learn how payroll cards and payment cards can help you attract and retain a skilled workforce while streamlining construction operations and reducing opportunities for fraud.
Many of these workers may be unbanked or underbanked, so it’s important for them to be able to access their wages quickly and easily. Prepaid payroll cards are the answer.
You can issue payroll debit cards to your construction workforce and deposit their wages directly to the card. They can then spend money from the card immediately, as the cards can be used for payment and cash withdrawals everywhere that debit and credit cards are accepted.
Advantages of Prepaid Payroll Cards for Construction Workers
Here’s how these cards can help your business and your employees:
- Construction employees can get paid immediately when they complete a shift, giving them instant access to their wages.
- Your tradesmen and other workers can easily withdraw cash or buy what they need, as the cards are accepted at more than 20 million merchants.
- Employees can use their payroll cards online to pay bills, securely save for the future, or buy essentials.
- You’ll increase the financial security of your construction workers, which leads to less stress and better productivity.
- Temporary, seasonal, and other workers don’t need a bank account to accept payment for their construction skills.
- People will prefer to work for you and you’ll be a more attractive employer than your competitors.
- You can avoid the time-consuming and expensive process of setting up, printing, and distributing paper checks.
- Issuing wages via payroll cards is much less expensive than a manual, paper check system. You’ll never have to distribute checks at your jobsite on payday.
Using Payment Cards to Streamline Construction and Control Costs
Another aspect of construction where prepaid cards can be super-useful is in controlling your costs. Construction projects are notorious for running over time and over budget.
“It’s safe to say that cost overruns in construction projects have become an industry-wide status quo. In fact, according to a study from KPMG, just 31% of all projects came within 10% of the budget in the past 3 years.”—Autodesk, 6 Common Causes of Cost Overruns in Construction Projects
Fraud is a major issue for construction companies too, with construction companies losing up to ten percent of their yearly revenue to fraud.
Prepaid payment cards can help with both cost control and fraud.
Controlling Construction Costs with Prepaid Cards
Cost leakage and high expenses come from several areas in the construction industry:
- Not planning for change orders or managing change controls
- Administrative errors including mis-scheduling or ordering the wrong materials.
- Misclassifying employees to avoid paying legally-owed taxes.
- Poor site management and miscommunication.
- Inefficient processes for ordering and making payments to vendors.
Prepaid cards can help with many of these areas. You can:
- Put strong controls over the employees that are authorized to make payments on behalf of your business. Only your foreman, project manager, and other accountable individuals have access to make payments.
- Fund your construction payment cards up to a certain amount, putting a hard limit on how much employees can spend. You can require detailed reasons for larger spending amounts.
- Easily track and report on spending by card and construction vendor in real time. This lets you understand where your money is going and lets you carry out an audit if anything looks strange.
- Use purchasing or expense cards to replace petty cash and reimbursements, giving you tighter expense control.
- Eliminate paper checks from the payment process. Processing, printing, and sending out paper checks is inefficient and leads to delays and rising costs.
- Pay suppliers more quickly to take advantage of dips in construction material prices or to reduce the total amount owed by taking advantage of settling invoices immediately.
Reducing Construction Fraud by Eliminating Paper Checks
One of the biggest drivers of fraud is the paper check. There’s been a concerted effort to make checks more secure, but there are still some fundamental flaws:
- Checks can be stolen or go missing.
- Checks reveal information about who you’re paying, who you are, your bank details, and more.
- Checks can be forged, leading to payment fraud and bad relationships with suppliers.
- In some cases, dishonest employees, suppliers, or partners may also attempt check fraud.
Prepaid cards are designed to reduce fraud and misuses as much as possible. This makes them a better alternative to checks for your construction business.
Prepaid payroll and payment cards can make things just that little bit easier for your construction business. You’ll attract better workers, reduce your operational costs, get better control of your expenses, and reduce fraud. That means you can seize all the new opportunities in the house-building market, confident that you’ve got this.
