Anonymised, illustrative composite. A contractor’s biweekly payroll close used to take two full working days — almost all of it spent re-keying subcontractor invoices into a second, separate T5018 tracking log by hand.
At a glance
A general contractor running 34 payroll employees alongside 12 active subcontractor accounts closed payroll every two weeks the same way for years: a payroll clerk spent two full working days — 16 hours — assembling the pay run, reconciling subcontractor invoices, and confirming everything matched before sign-off.
A time-and-motion review of the close broke those 16 hours into two pieces. Three hours went to the actual payroll run itself — the T4 payroll calculation, benefits, and remittance figures, all handled inside the firm’s existing payroll software and largely unchanged period to period. The other thirteen hours went to a single recurring task: matching each of the twelve subcontractor invoices to the correct job cost code, then re-keying the total by hand into a separate spreadsheet the firm used to track its running T5018 totals for the year, because the payroll system and the T5018 tracker had never been connected.
That reconciliation step existed because of a real filing obligation, not because anyone wanted to keep a second spreadsheet. Income Tax Regulation 238 requires a T5018 information return covering payments for construction activities, and once a reporting period is chosen — calendar year or fiscal period — “it cannot be changed for subsequent years” without the Minister’s authorization, with the return due “within six months after the end of the reporting period.” Keeping an accurate running total across the year, not just at filing time, was the whole reason the second spreadsheet existed in the first place — and the whole reason it had to be updated, by hand, every single pay period.
The firm replaced the email-and-spreadsheet intake with a portal that subcontractors submit invoices through directly. Each submission posts once, automatically, to both the job-cost ledger and the running T5018 total at the same time — the double entry the old process required disappears, because there is only one entry point left. The clerk’s job at close is now to review whatever the system flags as a mismatch between the invoice’s stated job code and the purchase order on file, rather than re-keying and cross-checking all twelve accounts by hand every period.
The thirteen-hour reconciliation step fell to about one hour: reviewing the two or three flagged exceptions a typical period produces, plus sign-off. The remaining payroll run also tightened, from three hours to one, because everything the clerk needs is already assembled in the system when the close starts instead of being gathered from scattered sources first. Total close time: 1 hour of exception review plus 1 hour for the payroll run itself, 2 hours in total — down from the 16-hour, two-day close the firm had run for years.
For the reconciliation gap this same discipline can catch in the other direction, see a T5018 filing that caught a missing subcontractor, and for the record-keeping obligation that makes an accurate running total non-optional, see surviving a payroll audit.
Left unfixed, the firm would have kept spending thirteen hours of a payroll clerk’s time every two weeks — roughly a full working week and a half every quarter — on a task that existed only because two systems tracking the same information were never connected. None of that time produced anything beyond a spreadsheet that duplicated data the payroll system already had; it was pure overhead sitting on every single pay period, indefinitely. It also meant the T5018 running total only ever existed in one clerk’s spreadsheet between close dates — if that spreadsheet had ever been lost or corrupted mid-year, rebuilding an accurate running total from twelve accounts of scattered invoices would have been a far larger project than any single close.
The tell is a manual reconciliation step whose entire purpose is keeping two systems in agreement with each other. Whenever a compliance obligation — here, an accurate running T5018 total, filed within six months of period end — is being satisfied by a second spreadsheet fed by hand from a first system, the fix is rarely more staff; it is one entry point instead of two.
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