Why would a small and medium business revert to manual data entry for payroll?
‘Hey, this manual payroll is surprisingly simple to process by hand.’
-You used to have a hundred employees and now you’re down to a handful, manual payroll is doable! It is certainly simpler to key in less data using potentially less time to do the task.
‘Oh my, I can adjust this instantly and not mess with this automated configuration!’
-You deal with unique, irregular pay structures because your number of staff kept fluctuating. Wouldn’t it be lovely if you have full control of instantaneous adjustments in your calculations without needing to reconfigure an automated system’s parameters?
‘I can save so much money on software subscription fees!’
-From a management perspective, the per-employee cost of automated systems does feel like an unnecessary expense when your workforce is shrinking. Opting to use existing, low-cost spreadsheet tools does sound very enticing.
Reverting is a ‘high-price and short-term saving’ strategy
You may have saved a little on the software subscription fees and IT support costs, but have you truly saved for the long term?
Positive fallacy
Awesome, you made the payroll entry worked by hand! However, did you really cut that overhead costs and time without the automated software subscriptions and system integrations? Assuming that you have reverted to manual entry, did you save yourself that extra few hours from having to reconcile your numbers with the bank? Or have you spent more hours trying to trace your deductibles and audit trails? Do you have immediate visibility to your cash flow, profitability and inventory levels?
Human-error
To err is human, but whether your employees choose to forgive is a different story. Error rates is part and parcel of manual entry, which often leads to incorrect tax withholdings or paycheck. When that happens, employee trust or even penalties are at stake. With this in mind, your accounting team or person has to allocate a good amount of time to fix those errors and recalculate those numbers.
Scalability Bottleneck
Like a bottle, the narrow neck gradually expands to the bottle’s body, much like your business. Your business growth will then come with a lot of repetitive tasks like invoicing, bank reconciliation, and expense tracking. When this happens, will your manual ways be able to expand as your business does? If it does not, would that mean that you’ve just drawn an Uno Reverse card to automation anyway?
In a nutshell
It has always been a challenge for the US construction industry to face a significant shortage of skilled workers. For years, the Associated Builders and Contractors (ABC) has expressed concern that the current workforce did not adequately meet demands (2025). Its latest figures show that the construction industry must attract around 439,000 new workers in 2025, with this year’s number increasing to just shy of 500,000.
To add salt to injury, hiring and retention risk was considered the top construction business risks by back in 2025 (Marsh, 2025). This means that a lot of construction firms are having a hard time retaining their current workforce on top of a crippling state of construction labor. Construction labor crisis can cost your finance team with field crews stretched thin. Salvaging the situation is a must, but having your accounting team doing manual data entry for payroll is not one of them.
Give Sage Intacct's AP automation, timecard integrations, and automated payroll workflows a try and let a lean finance team do more without adding headcount.
In summary:
- Construction labor demands are hard to fulfill and posing a threat to finance.
- Companies that have lost a substantial amount of workers are consider going back to manual data entry.
- Reverting to manual data entry is a ‘high-price, short-term saving’ strategy that is unsustainable.
References
Associated Builders and Contractors. (2025, June 3). News Releases. Retrieved from ABC: Construction Job Openings Decreased by 3000 in April, Down 45% since December 2023: https://www.abc.org/News-Media/News-Releases/abc-construction-job-openings-decreased-by-3000-in-april-down-45-since-december-2023
Associated Builders and Contractors. (2025, January 24). News Releases. Retrieved from ABC: Construction Industry Must Attract 439,000 Workers in 2025: https://www.abc.org/News-Media/News-Releases/abc-construction-industry-must-attract-439000-workers-in-2025
Marsh. (2025, March 26). Construction. Retrieved from Building the Workforce of Tomorrow: Overcoming Skilled Workforce Challenges for a Stronger Construction Industry: https://www.marsh.com/en/industries/construction/insights/building-skilled-workforce-overcome-labor-crisis.html
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