Controlling wages paid in cash on site
How a contractor controls cash wages on site using the approved pay run's payment schedule, the bank statement, payslips and split duties.
By Achekam · · 4 min read · For Construction businesses in South Africa, Nigeria, Kenya
On many sites, Friday still means envelopes. Some general workers have no bank account, some sites are far from a branch, and some crews simply prefer cash. So someone draws the wage money, someone fills envelopes, and someone drives to site and hands them out.
Every one of those steps is a chance for money to go missing, and cash wages are where payroll fraud likes to hide. This article sets out a routine that ties the cash to an approved pay run, to the bank statement and to a signature from each worker, using what Achekam's payroll provides.
Why cash pay days attract payroll fraud
The common schemes on building sites are not sophisticated:
- Ghost workers: names on the payroll who never worked, with the envelope collected by someone else.
- Inflated hours: overtime claimed for days the site was rained out.
- Short envelopes: a little taken from each one, blamed on counting errors.
- Leakage between bank and site: the amount drawn is more than the envelopes need.
Each one depends on the same person controlling more than one step. Ghost workers on bank-paid payrolls are a related problem, covered in stopping ghost workers with bank verification.
The approved run's payment schedule as the cash list
Start from the pay run, not from a foreman's list. In Achekam, a pay run is approved by someone other than the person who prepared it, nobody can approve a run that pays themselves, and an approved run is never recalculated.
Each approved run has a payment schedule that downloads as CSV, listing who is paid and how much. That schedule, and nothing else, is the cash list. If a name is not on it, there is no envelope. If a foreman says a worker was left off, the fix is a correction through payroll, not an extra envelope from petty cash.
Drawing the exact net amount and matching the withdrawal on the bank statement
Add up the cash workers' net pay from the schedule and draw exactly that amount, with a note of the run it belongs to. Ask the bank for the notes and coins you need to make up each envelope, so nobody is tempted to "round".
The approved run is posted to your ledger as a wages journal, with amounts owed to the tax authority and funds shown as liabilities. When the bank statement comes in, import it; Achekam accepts PDF, CSV, Excel, OFX, QIF, MT940 or CAMT.053 files and checks that the opening balance plus movements equals the closing balance. Then match the cash withdrawal. Bank lines are matched by suggestion and a person accepts each match, and a reconciliation completes only when there is no difference left or every leftover line is explained.
The withdrawal on the statement should equal the cash total on the schedule. If it does not, find out why that week, not at year end.
Payslips printed and handed over with each envelope
Payslips in Achekam are PDFs with your logo and details, downloadable one per person. For cash workers, print each payslip and put it in the envelope, or staple it to the outside. The worker can see how the net amount was worked out, and a short envelope is spotted on the spot rather than argued about later.
Keep a pay register for the site: one line per worker, the net amount, and the worker's signature or thumbprint when they receive the envelope. Ask for identification if the person collecting is not known to the paymaster.
Marking the schedule paid: what it records and what it does not
Once the envelopes are handed out, mark the payment schedule as paid. Be clear about what that does: it only records the fact. Achekam moves no money, and marking a schedule paid does not prove that each worker received their envelope. That proof is the signed site pay register, which should be filed with the run.
Unclaimed envelopes go back to the office the same day, are counted by two people, kept locked away and recorded. If a worker does not claim within the period your policy sets, bank the cash and correct the payroll record.
Splitting who draws, who counts and who hands out
The single most effective control is keeping the steps apart:
| Step | Who does it | Who must not |
|---|---|---|
| Prepare the pay run | Payroll administrator | The person who approves it |
| Approve the pay run | Financial manager or owner | Anyone paid by the run |
| Draw the cash | Accounts | The site paymaster |
| Make up envelopes | Two people together | One person alone |
| Hand out on site | Paymaster with a witness | The foreman who booked the hours |
| Reconcile bank and register | Someone outside the above | The paymaster |
AccountingTools explains segregation of duties: assigning the steps of a process to different people so that no one can both commit and conceal theft or error. On a small contractor with only a few office staff, rotate the paymaster and have the owner check the register against the schedule every month.
Making the next pay day different
Before the next cash pay day, print the latest approved schedule and the site pay register side by side and have someone outside the process compare them. Many contractors move workers to bank payment over time; when a new worker starts, ask for bank details as part of the details to collect before the first pay day. Recruitment agencies paying temporary staff face a similar control problem, discussed in temp payslips and the payment schedule.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
