Year End Closing Procedures

It’s that time of year again! Thanksgiving has just passed and its time to start planning for the end of year procedures.

Year end closing can be a little intimidating on the surface, so each year we publish a guide to year end procedures for Sage Master Builder to ease the concerns.

Sage has advised that the 2010 tax update will require you to be using Version 14 to get the latest payroll tax tables. If you haven’t upgraded to Sage Master Builder Version 14, call us and we can help you get upgraded.

Sage’s Technical Support no longer supports Master Builder versions earlier than 13, but our version 13 documents should work well with earlier versions.

Our Year End Closing Procedures documents can be found on the Downloads page of our website. Decide whether you need the Combined Closing document for December fiscal year end closings, or the Separate Closings document for closing payroll and 1099’s at the end of December and closing the fiscal year at some other time. Select which version of Sage Master Builder is appropriate for you. Right click on that link, select “Save Target As…” and decide where to save the file.

If you read through this document and follow it carefully, year end is easy! Consider practicing on a copy of your company on your local C: drive if you wish. Plan out the process with a calendar and you will find year end to be the least stressful part of this holiday season!

As always, don’t hesitate to call us if you have questions or concerns.

Windows 7 and Sage Master Builder

Twice now, important customers have upgraded machine operating systems to Windows 7 without checking with Sage Tech Support or us. Please note that Sage has not blessed Windows 7 for use with Sage Master Builder at this time. Sage is actively testing Windows 7 with Sage Master Builder, but has deferred an official blessing at the time of this posting. We have seen SMB run in a Windows 7 environment, but have also noted some unusual behaviors that may be attributable to the Windows 7 environment. If you don't mind being on the "bleeding edge," dive right in to Windows 7, but do so at your own peril.

As with Windows XP and Vista, do not use the Windows 7 Home products, as they are likely to present problems with networking. Instead, insist on Windows 7 Professional for your business workstations.

We will post updates on Windows 7 as they become available.

Some Sage Master Builder Users are preparing to blast out of the slump!

In the past year, a number of Sage Master Builder users have "hunkered down" and sought to cut overhead costs during the economic downturn. During this time, we counseled our clients to look for ways to use this time to streamline operations and optimize their use of existing resources, such as their investment in Sage Master Builder.

Recently, we have seen an increase in calls from users of Sage Master Builder looking for help in improving how they use the program. Some of the calls have been for:

• Improving estimating techniques and the integration of estimating with other areas of the program
• Improving purchasing processes, through use of the subcontracts and purchase orders modules
• Improving post completion job reviews (or job autopsies) to fine tune estimating and production processes and improve profitability

These users are positioning themselves to be more productive, effective and profitable as the economy improves and their business volumes grow!

Terminal Services is a reasonable solution for heavy hardware requirements

As noted earlier, Sage Master Builder Version 14 expects much stronger computing power than prior versions. A company may be faced with a significant investment to upgrading RAM and Processors on all the machines on which SMB Version 14 is to be run.

One alternative is to switch to using Windows Terminal Services. I'm not a technical network whiz, but in a nutshell, with Terminal Services, a single powerful server runs SMB for all users in the company. The users access the server over the network using more modest computers, sending keyboard and mouse commands to the server and receiving back display images from the server. All actual processing is done on the server and very little is expected of the remote computer's processor and resources.

Setting up a Terminal Services server is a bit complicated and requires a competent network consultant, but the return on this investment can make it worthwhile. Terminal Services Servers can be configured to permit workers outside the office, working from home, a field office trailer or a branch office, to access the power and information of Sage Master Builder just like workers in the main office.

SMB Version 14 wants more robust hardware!

Users of Sage Master Builder Version 14 are advised to upgrade their hardware and operating systems to avoid significant processing slowdowns.

Servers should be running 32 or 64 bit versions of

• Windows Server 2003,
• Windows Small Business Server 2003 with SP1 or newer,
• Windows XP Professional with SP2 or newer,
• Windows Server 2008, or
• Windows Small Business Server 2008

Servers should have 4 GB or more of RAM, 3.5 GB of free disk space, and an Intel Dual Core/Quad Core processor running at 2 GHz+ or its equivalent.

Workstations should be running 32 or 64 bit versions of

• Windows XP Professional with SP2 or newer, or
• Vista Business Edition

Workstations should have 2 GB or more of RAM for Windows XP Professional or 4 GB or more of RAM for Vista Business Edition, 3 GB of free disk space, and an Intel Dual Core/Quad Core processor running at 2 GHz+ or its equivalent.

The most significant change is the increased amount of RAM required. It is likely that systems that previously ran with lesser amounts of RAM and older processors, will continue to operate, but performance speeds may be unsatisfactory.

SMB Version 14 and Custom Reports

While we are excited about the impending release of Sage Master Builder Version 14 (see the earlier posts), there is apparently a minor challenge with some custom reports that would run without problems in earlier versions. The migration to a more robust and modern programming language has caused a few custom reports to not run properly.

If you have a "mission critical" custom report (either only run from menu 13-4, or run from a normal report printing window, but numbered lower than 21) you may need to have it adjusted to run properly with Version 14.

If you have such a "mission critical" custom report, and would like us to test it to ensure that you will not have any problems with the report after Version 14 is installed, please give us a call at 480-471-5305 or 602-357-0150 and we will be happy to test it for you on our pre-release copy of Sage Master Builder Version 14.

Sage Master Builder Version 14 and Subcontracts

Prior versions of Sage Master Builder have a Subcontract module to assist with the management of Subcontracts. Version 14 solves many of the concerns that users of prior versions have had about the module.

When processing a subcontractor’s invoice against an existing subcontract, users of earlier versions had to research approved change orders and prior invoices to ensure that the current invoice was correct and that the correct cost codes were being charged with the costs. This was often a frustrating problem, particularly with heavy users of the subcontract module.

Version 14 of Sage Master Builder takes giant strides to improve controls over subcontracts created with Version 14 and later versions. Unfortunately, subcontracts created with earlier versions do not get “converted” to the functionality of Version 14, do not have the same controls available, and will have to be handled using the processes developed for earlier versions of the program.

What’s so special about Version 14 and Subcontracts?

• When approved Subcontract Change Orders are created on the Budget and Sub Change Details tab in menu 6-4-1, the system will “post” the change order to the grid of the original Subcontract in menu 6-7-1. So, whenever one looks at a Subcontract Grid in 6-7-1, one can see both the details of the original Subcontract, and how that original Subcontract has been changed by approved Subcontract Change Orders.
• When a subcontractor’s invoice is entered in menu 4-2 against a Subcontract created with Version 14, the Accounts Payable Invoice grid is populated automatically with the lines that exist on the Subcontract grid. After adjusting the amounts in the grid to reflect the amount of the invoice being processed, the AP Invoice can be saved with Auto-Costing, and the job costs will be charged to the proper cost codes specified on the Subcontract grid. This also helps prevent processing invoices against Subcontract Change Orders that have not yet been approved, since they will not show up in the grid. The AP invoice amounts are then also “posted” to the corresponding lines of the Subcontract grid. Whenever one looks at a subcontract record and its grid, one can see immediately how much has been invoiced against each line item of the Subcontract.

We can arrange for an on-line demonstration of the new features if you want more insight into these enhancements. Just send an e-mail or call at your convenience.

Sage Master Builder Version 14 and the Paperless Office!

Most contractors have probably given thought to going paperless. When one factors in the cost of storing paper documents, the environmental impact of consuming large quantities of paper, and the general inconvenience of having to dig in a filing cabinet when one wants to research an issue, going paperless seems like a terrific idea. But until now, the idea also required a significant investment in separate software to capture and organize the information, and the link between the captured electronic document and the accounting record was tenuous at best.

Sage Master Builder Version 14 includes an exciting feature that users will surely have to consider – Attachments. If you can create or find a file or website, you can attach it to a record so that the file or website is available to anyone following in your footsteps in the program.

Consider the following scenarios that represent real opportunities for Master Builder users:

• An accounts payable bookkeeper has an inexpensive flat bed scanner (cost less than $100) attached to his computer and scans vendor invoices to a .pdf file saved to the desktop. During the entry of the vendor invoice with a Review status and the hot list box checked, the bookkeeper attached the .pdf image of the invoice to the record. Later, the project manager reviews the hot list for his project, sees the Review status invoice on the hot list, opens up the AP invoice record, opens the .pdf image of the record, records a comment indicating approval of the invoice and how it was job-costed, removes the hot list status and changes the status to Open. The paper copy of the invoice never gets lost or misplaced, the bookkeeper can keep track of invoices in need of approval, and there is no file cabinet required as the image is in the computer, attached to the proper record!
• An Estimator is assembling subcontracts for a project by preparing Requests for Proposals in menu 6-11-1. Pages of the plan specifications book are scanned to pdf, along with the applicable section of the drawings, for the scope of work requested. The RFP record is completed along with careful notes and instructions in the Notepad note. The RFP report is printed to a pdf for emailing to the potential subcontractors and the pdf is attached to the RFP record also. The RFP pdf, along the specifications and drawings are emailed directly from the RFP attachments button. When the proposal comes back from the potential subcontractor, the proposal is scanned and attached to the RFP record as well as noting that the RFP has been responded to. When the proposal is accepted and a subcontract record is created, the attachments can be attached to the subcontract record, along with a scan of the fully executed subcontract document. Since everything is attached to the subcontract record, a superintendent in the project field office can remote into the office computer and see all of the important and related documents while online. This couldn’t be done if all the documents were still on paper, filed in a filing cabinet!

These are just two of the hundreds of possible scenarios where Sage Master Builder Version 14 and its Attachments feature can be used to go paperless and drastically improve efficiency in the office.

Sage Master Builder Version 14 is Coming Soon!

When Sage announced that there would not be any significant enhancements added with the Version 13 release, I was disappointed. I understood that they needed the time usually devoted to new enhancements in order to translate the existing program from Visual Basic, to a more powerful and adaptable language, C# (C sharp), that would provide a better platform for moving Sage Master Builder forward. So the Master Builder world waited…and competitors got busy trying to suggest that this was a death-knell for Sage Master Builder, that Sage was ignoring Master Builder to promote the more expensive and more complex Timberline Office product.

Sage has announced that it will begin shipping Sage Master Builder Version 14 in August, 2009.

I can now say that the wait was worth it! I have been playing around with a pre-release version of Sage Master Builder Version 14, and I can’t wait to show it to my clients and prospects! Some of the enhancements found in Version 14 include:

• Attach Files and Links to Records – So powerful that I’ll devote an entire blog entry to this enhancement!
• Mouse Wheel Scrolling Enhanced – Users can now use their mouse wheel to scroll through grids, lookup windows and the Service Dispatch Board.
• More Under-billed Jobs Available for Display on the Executive Dashboard – A link to show all under-billed jobs (instead of the top five most under-billed) is now available on the Executive Dashboard.
• Support for 64-bit Operating Systems – SMB now supports the 64-bit versions of MS Windows XP Professional, Vista Business, and Server 2008 operating systems.
• Integration with MS Outlook – Outlook can now be launched with a file attachment from many points in the program.
• Improved Workflow for Changing Periods and Closing the Fiscal Year – The user interface has been improved for the old menu item 1-6 Audit/Close Books to reduce confusion and misunderstanding of the process.
• New Income Statement Format – Report 2-3-0-34 Income Statement by Period has been added which now shows each of the 12 periods of a year and a total for the year. This report must be printed on legal sized paper.
• Post Retention-only Progress Bills – One can now post a progress billing that merely reclassifies amounts from Retention to Currently Due, even though there is no current income being billed and still be able to create a “Next” Progress Billing record.
• New Columns Added to Open Invoices and Paid Invoices Lookup Windows in Vendor – This will help with looking up vendor invoices.
• Payroll Check Date vs Quarter Audit Error Handling – Users can now correct their own payroll audit errors arising from conflicts between payroll quarters and payroll check dates, because the payroll quarter field is now editable on saved payroll records.
• Certified Payroll Reports Now Can Mask Employee Social Security Numbers – A new global calculated field has been added that makes masking an employee’s social security number much easier.
• Reprint Direct Deposit Report – An option has been added which permits the reprinting of a direct deposit file report.
• Update Maximum Only for Payroll Calculations – An option has been added which permits users to “push” new calculation maximums out to appropriate employees without wiping out the rates elected by the individual employees, which is particularly useful for 401k contribution calculations.
• Daily Field Report Grid Notes to Payroll and Job Cost Records – Grid notes from the daily field report module now transfer to payroll records and resulting job cost records.
• Integration of Subcontract, Subcontract Change Orders and Accounts Payable Invoices – Another killer enhancement, so powerful that I will devote another separate entry on it.
• RFI and RFP Numbering by Job and Phase – The program can now be configured to assign numbers sequentially by Job and Phase, rather than continuously for all jobs.
• Job Income Statement Report – Report 6-1-4-71 Job Income Statement has been added to the standard reports. It reflects job costs by cost type, billings from both contracts and service receivables, gross profit and gross profit percentage by job and phase. It does not, however, recognize percentage of completion adjustments and thus may not be a true representation of profitability.
• Financial Review and Project Review – The modules found in menu 13-1 and 13-2 have long been broken and did not reflect correct information. Sage has corrected and enhanced these graphical representations of key financial and project information! This should be a real plus for those managers who find graphical information more useful that traditional tabular accounting data!

There is also a long list of fixes and enhancements to the online Help text.

I hope you will agree that many of these enhancements are exciting, and a number of them have been long overdue. Keep an eye on the mail in August for your copy of the new program!

I'm An Accountant, What Do I Know About Estimating?

A prospective client recently asked if I was qualified to train his staff on SMB Basic Estimating, and what was the best database to use. I responded:

You are correct - my background is in accounting, and I have never worked as an estimator in the real world. I have implemented SMB Basic Estimating for about a dozen companies. I do have a thorough understanding of SMB Basic Estimating, having been "certified" in Estimating, as well as Service Receivables, Project Management and Report Writing, for over 7 years. I teach estimators how to use the program, not how to estimate.

I do have strong feelings about Estimating with SMB:

• SMB is a terrific estimating tool for an experienced estimator.
• It does not replace an experienced estimator, but makes the estimator more productive, and the estimating process more transferable to other estimators in your company.
• SMB Estimating implementations will fail unless the company designates a responsible estimating employee empowered and enabled by management to spend the time and effort to ensure that the estimating implementation is done in a fashion consistent with existing estimating assumptions and practices. This is a working position, not supervisory.
• In my opinion, there are no useable prebuilt databases for SMB. I have little confidence that any prebuilt estimating database has the materials that your company buys, at the prices that are available to your company. The production rates for labor in a prebuilt database are similarly a mystery - do they really reflect the production capabilities of your company? Finally, prebuilt assemblies are not necessarily reflective of how your production staff will approach a project.
• I think that using the same database as all of your competitors (like RS Means) for anything other than a "rule of thumb" test of your own estimate, is likely to leave a contractor in the middle of the pack on bid opening day.
• I am a firm believer in a company taking full charge and responsibility for the most important task that they can do - estimating and bidding their work. If they cannot take the time to build an estimating parts database, assemblies and templates that reflect their typical materials, the prices they receive from their suppliers, the production rates that reflect their crews' talents and shortcomings, the assemblies that make sense to their estimators and project managers, and the templates for the types of projects for which they typically compete, then they should not attempt to use SMB Basic Estimating.

This is the point where some will say "this accountant is full of manure," but like I said, I have some strong feelings (and real affection) for SMB Basic Estimating.

Changes to Arizona Withholding

Arizona Income Tax Withholding Amounts are calculated as a percentage of the Federal Income Tax Withholding Amount. Federal Government has recently reduced the amounts to be withheld for Federal Income Tax. In an apparent effort to avoid a corresponding decrease in Arizona Income Tax Withholding Amounts, Recent legislation has increased the percentages to be used for calculating the Arizona Income Tax Withholding Amount.

Follow this link for a table of the new changes.

Sage Master Builder users will have to manually adjust the Rate column on each Arizona employee’s Arizona State Income Tax calculation. Effective May 1, 2009, replace the previous percentage rate with the new percentage from the above table. Another manual update will have to be done on January 1, 2010 as indicated above.

New SMB Update is Available

Sage recently released a new update which includes revised federal withholding tax tables that reflect changes as a result of the recent economic stimulus legislation. This update also includes a change in how workers compensation is calculated in Utah.

Current Tech Support subscribers should have received an email notification, probably dated 03/19/2009, with a subject of "Sage Master Builder Software Update 09-C". This email contains a link and instructions on how to download and install the update.

Send us a note if you have any questions or concerns.

UPDATE

The new update, which is contained in a file named SMB1340.exe, inadvertantly broke the Master Builder API, which is necessary for interfacing with some third party applications. As soon as Sage realized the problem, they corrected it by issuing a patch for the API, SMBAPI1340.exe. So, if the API is important for your company, don't forget to download and install the API patch, SMBAPI1340.exe, after installing the tax update, SMB1340.exe.

Frustrations!

One thing that really saddens us is when we find a Sage Master Builder user that is frustrated with his use of the program.

All too often, users continue to perform tasks in the way they (or the person they succeeded) were taught, without exploring whether there is a better way to accomplish their tasks. One of the great blessings (and curses) of Master Builder is that there are often several ways of using the system, some of which may be better suited to a particular user’s needs than others. There are many keyboard shortcuts often ignored that can help with a process. Templates are available in many different areas but frequently overlooked.

Many times, we hear from an owner or manager who wants to see certain information in a report, but no one has produced that report to meet his needs. We can often show him an existing report that meets his exact requirements, or gets close enough to satisfy the user’s need. There are over a thousand standard system reports that come with the program, as well as a very useful report writer that can solve many other needs. The Query Wizard can create on screen reports very quickly as well! We also use Crystal Reports to create complicated reports when we determine that the Master Builder report writer cannot solve a particular problem.

The stories of dissatisfaction with the way a user’s system was originally configured and implemented are the most frustrating of all. Too many times, users have tried to implement their own system without experienced implementation assistance. Some sales pitches in the past undersold the value of implementation assistance and encouraged new users to install, configure and implement the program themselves, relying only on the Internet-delivered classes and the on-line help screens. We have helped many such frustrated users reconfigure their systems or even re-implement their entire system, leaving the users much happier.

What is most frustrating to us is that many users just don’t know that they can begin to solve the problems that cause their dissatisfaction with a phone call!

Solutions for a Difficult Economy

We get a lot of questions about what contractors should do during a recession. My answer is really simple – Do What You Should Have Been Doing When Times Were Good! There’s no time like the present to start doing those things that would have made you more efficient and profitable during the good economy.

What sort of things?

• Don’t waste money on unnecessary capital expenditures or overhead. That doesn’t mean “Don’t Spend,” but just be certain that the spending is for necessary and beneficial costs. If you’re overhead is bloated with more staff than needed, more office space and expenditures than needed, or other questionable costs that you know the company really doesn’t need and doesn’t contribute in a meaningful way to the company profitability, cut it out! How much more profitable would you have been during the good times if you had taken this approach then?
• Take a Zero Based Budget approach to your overhead. Don’t just accept the rationale that we spent this amount last year, so we’ll spend 5% more this year. Look at every overhead cost and ensure that it is necessary and productive.
• Don’t stop marketing! Just make sure that your marketing efforts are properly targeted and cost effective. Marketing during a down economy will continue to build market awareness of your company so that when the economy does rebound, your sales efforts should slingshot forward, unlike companies that cut their marketing when the economy started to slow down.
• Control your job costs as if your company’s life depended on it, because it does! A recent survey showed that job cost slippage, or the difference between estimated job costs and actual job costs was the single largest predictor of success or failure among a select group of remodeling contractors. Failure to accurately estimate job costs and failure to produce the actual work according to the cost estimate result in lost profits that fall straight to the bottom line.
• Perform job autopsies to learn why you have job cost slippage. Job autopsies should be performed on jobs to determine why you did well on some jobs and poorly on others. The information learned from an autopsy should then be used going forward to improve on future jobs. See my white paper on Job Autopsies for more information.
• Use your technology wisely. If you have invested in Sage Master Builder, make sure that you are reaping the efficiencies available so that your staff is doing the best with the limited resources available. If you aren’t using a purchasing management system for subcontracts and materials purchases, consider implementing one to increase management control over such costs.
• Training is a wise investment. Training staff to perform their jobs more effectively is almost a no-brainer! Making sure that your staff knows how to use their tools the right way, whether it’s a new machine in the shop or Sage Master Builder will increase staff efficiency, enabling them to do more work in the time allotted. Like any other cost, make sure that the training is cost effective and time and cost savers like the internet are being used, rather than spending large sums on travel and lodging.

I often worry that the media is stampeding everyone into a doom and gloom scenario during this recession, prompting businesses to overreact to the economic forecasts. Pay attention to your own economic indicators and react to them appropriately.

What Causes Master Builder Data Corruption?

Those Sage Master Builder users that read their original installation instructions (and you might be surprised at how few actually bothered to read the installation instructions!) may remember an instruction to Turn Off Write Behind Caching. Too often, when working with a client that has experienced data corruption evidenced by General Ledger Audit errors, we find that Write Behind Caching is not turned off. Sometimes we find that it was never turned off on a particular machine, or the machine was recently replaced and they forgot to turn off the caching when they installed Sage Master Builder, or a well-meaning computer technician turned caching back on while trying to improve the perceived performance of a computer.

What is Write Behind Caching? Write Behind Caching is a technique used by the Windows operating system to improve the perceived speed of a computer. If a computing process includes a significant amount of writing data to a hard drive (which is a relatively slow process) and there are other processes to be performed, the operating system may decide to hold the data that is to be written to the hard drive in RAM or volatile memory until the operating system decides that it now has the time to write the data to the hard drive.

This can create real problems for most accounting programs that involve complicated postings or writing data to a hard drive. When Master Builder saves an accounting transaction, there are often a large number of posting or writing processes involved. If the entire transaction, with all of its data postings, is not completely and timely written to the hard drive, the data may not be available for use by another concurrent user. If part of a transaction is being held in the cache of computer that suddenly loses communication with the hard drive to which the data is to be written (as with a file server), the complete transaction may never get posted into the data files and data corruption, including unbalanced transactions and unposted updates to records, may result.

The long and short of it is simple – turn off the Write Behind Caching on each machine that uses Sage Master Builder! The nearly imperceptible loss of processing speed is a small price to pay for reducing or eliminating data corruption and those pesky audit errors.

Feel free to send us a note if you need help in checking your Write Behind Caching status.

New Budgeting Tool for Sage Master Builder Users!

I’m really excited about a new product on the market for use by Sage Master Builder users – zMgtToolkit by Zoom Integrated Products.

One of the more tedious tasks that SMB users face is creating operating budgets and loading them into the General Ledger Account records. The problem is compounded when departments are used as there is no automated process for entry of the department operating budgets into the department sub-account records or roll up of the departments budgets into the consolidated account.

zMgtToolkit solves this problem with a powerful and information packed budget creation and posting tool. At $295 for the first user license (and $59 for each additional user), the program is a bargain and will pay for itself in saved time the first year that you use it for your budgets!

The program is named a toolkit because Zoom is developing a series of modules that will perform a number of other useful tasks, including

• Budget Forecasting
• Budget Management
• Budget Historical Review
• Break-Even Analysis
• Cash Flow
• Charts and Graphs
• Pivot Grid
• Reports
• Department Allocation
• Unapplied Direct Cost Allocation
• Overhead to Direct Cost Allocation
• Archive Import
• Cost Code Conversion
• Parts Update
• Assembly Quick Replace
• MB Find and Replace
• Recalc Assembly Totals
• Recall Jobs

When these modules are developed and available, there may be nominal additional license fees.

Send us a note or leave a comment if you want additional information.

Dual personalities

Unlike the majority of independent Sage Master Builder Certified Consultant companies, we work as a team of two separate and distinct individuals. My experience is that of the full charge bookkeeper.

I understand the enormous task of running a one-woman(man)-office. I have kept many companies' accounting books on various systems over the years, starting pre-computer days with hand written 3-ring binder journals. As a CPA's inhouse bookkeeper, I was responsible for the small client bookkeeping service. All taxes, payrolls, standard filing requirements and monthly/quarterly/yearly accounting reports were completed by me.

When I train new users or exchange tips with non-newbies, my suggestions are also from actual experience typing into Master Builder on a daily basis these past 9 years. We use Master Builder to operate our own company. We have scaled down its great potential to fit our needs. I ease my daily typing entry by using its ability to fully integrate into its entire system from one saved record.

Having spent many hours over the past years researching other peoples' mistakes, one of my common pieces of advice is to use the note writing feature available in most of the screens. Leaving a trail of information for the future to understand why something was handled in a different fashion this one time can be an enormous help.

Sage Master Builder is Not for Everyone

Sage Master Builder is targeted to general and specialty contractors and home builders doing $3 to $100 million of work per year, but niche markets with higher volume of smaller jobs tends to make Master Builder an appropriate solution for some companies doing at least $1.5 million annually.

There are several other indicators that we consider before recommending Master Builder to a contractor or home builder:

• A willingness on the part of the company management to ensure that the Master Builder implementation is a success and that Master Builder becomes an integral part of the everyday life of the production side of the business as well as the accounting and administrative side. This business solution is a top-down product – it’s most effective when management is involved in the implementation and training process. If the owners are active in production and/or accounting and administration, they also must be interested in acquiring the skills to use Master Builder themselves.
• Recognition on the part of management that full accrual accounting is the best approach for most contractors to manage their business. Other accounting methods, such as cash basis, may indeed be appropriate for income tax purposes, but day-to-day accounting and management of construction companies is best done on an accrual basis. Recognition of income from long term fixed price construction contracts is generally best accomplished with percentage of completion accounting. Master Builder also accommodates companies that must account for the construction of inventory or work in process as appropriate for many home builders.
• Recognition on the part of management that it is just as important to know how money is made or lost on a project as it is to build a project that makes the client happy.
• Recognition on the part of management that the accounting and administration function is an important part of their organization. This is usually demonstrated by an investment in hiring a qualified accountant (or a strong full-charge bookkeeper) with significant experience in the industry.
• An understanding on the part of management that the processes incorporated into an “off the shelf” integrated construction management system like Master Builder are often chosen from among several possible ways of achieving the same result. The developers of Master Builder spent much effort to ensure that the processes adopted represent appropriate best practices for the construction industry. As such, an adaptation of existing policies or procedures to the way Master Builder operates may be necessary.

If we don’t see these indicators, we have to question whether or not Master Builder will be a good fit for the company. More than a few times, we have suggested that a contractor look elsewhere for a solution.

We Love Sage Master Builder

We have great appreciation for the power of Sage Master Builder. It is a well integrated real time construction management system, with

• powerful accounting and job costing capabilities
• payroll processing with precise labor burdening and job costing
• construction industry standard billing processes
• effective purchasing management
• project management tools
• parts and assemblies based estimating

Because the program was originally developed by a contractor, it has the tools and features that contractors, home builders and service contractors need to run their business. Since it was developed by one programming group, the various areas of the program are seamlessly integrated and have a consistent look and feel.

Because we recognize its strengths, we use Sage Master Builder for our own accounting, too!