How to Replace a Check Written in a Prior Period

I have recently received several inquiries about how to replace a lost payroll or vendor check written in a prior period without affecting the previously reported financial statements or tax reports.  If all you need to do is replace a previously written check with a new check to the same payee and for the same amount, follow these simple steps:

• In menu 1-1 Checks/Bank Charges, record a reversal of the original check by entering the original bank account, the original check number followed by the word “Void”, the current date, a description like “Void & replace lost check”, the payee name and address (or just enter the vendor number), and in the grid enter a clearing account and the net check amount as a NEGATIVE amount in the Debit Amount column. Save this entry to the current accounting period.
• Then, also in menu 1-1, record the replacement check by entering the bank account you are drawing the replacement check on, “0000” in the check number field, the current date, a description like “Replace original check number…”, the payee name and address (or the vendor number if it was used in the reversal above), and in the grid enter the same clearing account and the original net check amount as a POSITIVE amount in the Debit Amount column. Save this entry to the current accounting period also.
• Then, also in menu 1-1, click on the print button, enter the cash account for the replacement check, and print the replacement check on your check stock following the usual 1-1 check printing process.
• When next reconciling your bank account, clear the voided check and the original check, as they will offset. 

By using offsetting entries in the same accounting period, you don’t affect your accounting and tax reports.  Using the vendor number in both the reversing and replacement entries ensures that the 1099 balances are not misstated as well.

If you want additional guidance on this process, or more complex situations, give us a call at 480-471-5305.

Equipment Management (a nearly forgotten module)

How often does an owner or manager ask his accountant (or him- or her-self) “how much does that truck or piece of equipment cost us?” How often is the response to this question “we don’t know!?" Is your investment in heavy equipment, shop equipment, or vehicles a significant cost of your operation? Is the cost of owning and operating this equipment being consistently and accurately charged to jobs based on a measure of use, like miles, tons, hours, days, weeks or months? Are you recovering enough equipment ownership and operating costs in your job costing and estimating assumptions?

The Equipment Management module is designed specifically to collect and organize the cost of owning and operating equipment, and then recover that cost by charging out to jobs the estimated cost of owning and operating that equipment using estimated cost recovery rates per measure of use (i.e. per mile, per hour, per day, etc.) With the module, a thoughtful and creative implementation, and diligent bookkeeping, users no longer have to hear the answer “we don’t know!”

If you want to learn more about using the Equipment Module, give us a call at 480-471-5305.

How Do You Know What You Don’t Know?

One of my favorite clients sent me an email this morning that asked for my assistance with the following:

“One of my goals is to find out from you what is in [Sage 100 Contractor] that we can use for more effective results for this next year.  I don’t know what I don’t know.  I am familiar with what I use all the time but I believe there is more available that I am not aware of.  We will experience great growth this year.  We will be hiring additional staff but I want to make sure we are effective and efficient with the tools we have in hand to maximize our results.”

This client has used the program for decades and might be described as a “power user,” but she has a nagging suspicion that there may be more functionality in the program than what they are currently using.  This is a pervasive problem with many of the users that I come across.  This is often understandable since initial implementations are often geared toward getting a new user up and running with the basic accounting capabilities they had with their previous accounting package. Too little time and attention is devoted to identifying and learning new functions that can benefit their organization.

How did I respond to my client’s request for assistance? My reply included the following:

“There are a couple of ways to assess the "not knowing what you don't know" problem.  I could spend a day nosing around your office, observing and asking questions to try to identify areas that can be improved.  Or you and your staff (accounting and project management) can make lists of things that annoy them, things that they spend valuable time doing in Excel or Word, things they wish they had, things they suspect the program should do but they just don't know how to do, etc. The lists can be compiled and sorted and a [training] plan can be developed.”

Many clients have purchased modules of the program and then left those modules unused for years! I often see Estimating, Document Control, Equipment Management, Scheduling, Change Orders (!), Insurance Certificates (!), Credit Card Management, ACH/Direct Deposit Payroll and Vendor Payments, and similar modules forgotten and unused, or perhaps just underused.  Wise clients will take a little time to scan through the program menus just to remind themselves in general sense of what the program can do, and then call us to ask if it might be of use to them.

Clients are always calling with requests for a report that shows certain information that they need to run their business.  Often the report already exists in the program and we can point them in the right direction and give them pointers on how to use report selection criteria to hone in on their specific need. If a report doesn’t already exist, we can usually create a custom report to meet their need.

If you wonder what you don’t know, take the time to jot down notes about those things that annoy you about how you use the program, what tasks or reports you spend too much time preparing with Excel or Word, what things you wish the program could do for you, or what data you want from the system that you currently aren’t receiving.  Then give us a call and talk it over with us.  It may cost you some consulting fees, but the end result is usually well worth the investment.

Closing Out the Year

With the introduction of multiyear general ledger functionality in version 19 of Sage 100 Contractor, year-end closings have become much more relaxed.  No longer do we have to worry about closing the general ledger before we can record any transactions relating to the new fiscal year, and no longer do we have to understand how Period 0 postings work.

However, let’s not get too relaxed….  The Payroll Year must still be closed and a 2015 Payroll Archive must still be created! Fortunately, this is not a terribly difficult or time consuming process, but you have to time it correctly.

In December

• Ensure that you have the latest version of the program, currently version 19.6.54, installed.
• Ensure that your employee names, addresses and social security numbers are up-to-date.
• Determine with your tax advisor or benefits administrator whether you will be required to file forms 1094-C and 1095-C to comply with the Affordable Care Act.  If so, ensure that the monthly data is present and up to date on the ACA Tab of the 5-2-1 Employees records.  Doing this before the Close Payroll Year process will help you avoid making entries twice.
• Run 5-3-7 Payroll Audit regularly and ensure that any audit errors are corrected.
• Be aware that you may receive information from payers of Third Party Sick Pay that can affect your payroll tax reporting.  Ensure that any notices received have been properly reflected in your payroll records.
• Determine with your tax advisor that all amounts that should be reported on W-2 forms have been included, including taxable vehicle allowances and certain taxable benefits for owners.  Also review which payroll calculation amounts may have to be reflected on the W-2 forms.

After the Last 2015 Payroll is Processed and Before Any 2016 Payroll Records are Entered

• Run 5-3-7 Payroll Audit and ensure that there are no audit errors.
• Make a complete backup of the current company’s data folder.
• Decide ahead of the closing how you will name the 2015 Payroll Archive folder.
• Decide ahead of the closing whether you want to remove employee records for workers that have left the company.
• Log into the current company as Supervisor with Exclusive Access.
• Run 5-3-8 Close Payroll Year and follow the prompts and instructions carefully. It’s really rather simple!

Remember – prepare your 4^th quarter payroll returns and your W-2 and W-3 forms from your 2015 Payroll Archive company.

Contact us at 480-471-5305 or walt@mathiesonconsulting.com for additional information or assistance with closing your payroll year.

Fall Maintenance

Look at the calendar! The end of the calendar year is fast approaching. There are a few things that Sage 100 Contractor users should start working on so that the end of the calendar year goes smoothly.

Affordable Care Act Compliance
Make sure you know what your responsibilities are for reporting and compliance with the Affordable Care Act. Check with your tax accountant and your benefits provider to get the best information about your responsibilities. Current versions of Sage 100 Contractor will generate the data and forms required.

Form W-2 Wage Statements
Make sure that your employee data is up to date. Verify employee addresses and social security numbers. Make sure your payroll account bank reconciliations are current and complete (and thus all payrolls are recorded), and investigate why payroll checks are still outstanding long past the time you would expect. Run the Payroll Audit (menu 5-3-7) and ensure that all errors are corrected. Discuss with your tax accountant what payroll calculations should be shown in which boxes on the W-2s.

I am a huge fan of the built-in Aatrix E-File feature, especially for W-2s. Aatrix will print and mail all employee copies of W-2s and will submit electronically the data to the Federal and State governments. All you need to print is the employer copy for your records and that can be printed to plain paper. With Aatrix E-File, you don’t have to order preprinted forms and special envelopes. The cost of the Aatrix E-File W-2s is so reasonable when you consider the cost of acquiring the forms, applying postage, and the manual labor of stuffing special envelopes, I strongly endorse E-Filing.

If you do not wish to use the Aatrix E-File feature, you should order now the forms and envelopes required from Sage Checks and Forms. DO NOT plan on getting your forms from Staples or other office supply stores as the paper (4-up perforated paper) and envelopes are not typical.

Form 1099 Statements to Recipients
Make sure that your vendor data is up to date. Obtain W-9s from all vendors so that you can verify addresses, federal identification numbers and legal status, such as corporations, individuals, limited liability companies, partnerships, etc. With this information, you can then ensure that each vendor has the correct 1099 Type assigned. Use report 4-1-1-61 Vendor 1099 Report to see the 1099 Type of each vendor and whether or not you have a federal identification number for those vendors to whom you may be required to provide a 1099.

The built-in Aatrix E-File feature also works for 1099s! As you might guess, I’m a big fan of this feature as well. The comments above about W-2 E-Filing also apply to 1099 E-Filing.

If you do not wish to use the Aatrix E-File feature, you should order now the forms and envelopes required from Sage Checks and Forms. DO NOT plan on getting your forms from Staples or other office supply stores as the paper (4-up perforated paper) and envelopes are not typical.

If you have any questions or concerns, don't hesitate to send us a note or give us a call.

A Little Bit of Imagination!

Recently, a client asked what they could do to solve a longstanding problem for their business.  They are an equipment sales and service organization, and have a high volume of materials purchases and returns.  Management was concerned that they either were not returning defective and or warrantied materials, or the suppliers were not giving them credit for their returns.

At first glance, there is no module or menu item labeled “Materials Returns” in Sage 100 Contractor, so the easy answer was “sorry, there’s nothing to help you in the program”. But let’s look a little closer at the problem. In reviewing the request with the client, we found that they needed to be able to keep records of what items were returned to their vendor, how much of a refund or credit they expected to receive as a result of the return, and whether or not they had actually received the credit from the vendor. With just a touch of imagination, you might see that this problem is an exact opposite of how purchase orders work. Purchase orders communicate to a vendor what you want to purchase, how much you expect to pay for it, and whether or not you have entered an AP invoice as a result of the purchase.  A purchase order record with negative quantities (a positive quantity is an item purchased and to be paid for, a negative quantity is an item returned for a credit) does just what an materials return record should.

To make this work effectively, we made a few changes in the system To keep the materials returns records separate from the materials purchases, we defined a purchase order type for returns, repurposed a user-defined field for the vendor’s RMA or returned material authorization number, and repurposed the purchase order grid line user-defined field for the reason the item was returned.  We created a specific report and report form, which we called a Materials Return Transmittal to effectively document the return to the vendor, specify what was expected of the vendor, and the amount that was expected to be received as a credit from the vendor.  When the credit memo is received from the vendor, the entry in accounts payable invoices should reference the order number so that the open record could be marked as closed. A Materials Returns List report was also created that shows the current status of materials returns.

This is just a brief synopsis of what can be done with a little imagination.  If you want more information about how to implement a materials returns tracking system, give us a call or send us an email!

Archiving Company Fiscal Year Data

When Sage 100 Contractor Version 19 was released, there was great joy because the multi-year general ledger functionality drastically reduced the perceived pressure of having to archive the ending fiscal year before entering any data for the new fiscal year.  Version 19 changed all of that by permitting several fiscal years to co-exist in the same database.  The old fiscal year can be archived at your leisure, after all entries and adjustments have been made for that year.  Because it can be done at one’s leisure, I find that archiving is sometimes forgotten and we start to see three or more fiscal years residing in the same database. While the system works fine with several fiscal years still resident in the database, you can expect to see processing times start to slow down and people will get annoyed with job lists that include jobs done two years earlier.  The solution is to archive your oldest fiscal year soon after all of its data entry is complete and in agreement with your published financial statements and tax returns for that prior fiscal year.

Usually around this time of year, we see that financial statements and tax returns for the prior fiscal year have been completed.  Make sure that your outside accountant has provided any adjusting entries that they want posted to your books.  Post them to the correct prior fiscal year.  After the adjusting entries are recorded, run a Trial Balance (report 2-1-0-21) for Period 12 of the prior fiscal year and compare it to your published financial statements for that year (or send it to your outside accountants and ask them to confirm that this trial balance agrees with their work papers).  When your adjusted trial balance is deemed in agreement, that prior fiscal year can be archived.

Archiving must be done by the Supervisor user, with Exclusive Access.  Larger and busier companies find that archiving is best done very late in the day or on weekends when Exclusive Access doesn’t prevent other users from doing their own work in the system.  Decide whether you wish to, during the archiving process, remove:  (1) jobs with a status of Closed or Refused, (2) paid or void payable invoices not related to a job, (3) service receivables records with a status of Paid, Completed, or Void dated prior to a specific date of your choosing and (4) closed purchase orders dated prior to a specific date of your choosing that are not related to a job.  Purging can add significant time to the archiving process so you may elect to perform the purging of this data from the current company at a later, more convenient time.

Other preparation should include running a general ledger audit in menu 1-6, searching for and resolving Ledger Transactions (menu 1-3) with a transaction number of 0000, usually the result of not completing the printing of GL Checks (menu 1-1), and deciding what you want to name the archive company data folder.  It could be something like [Company Name] 123114 GL.  Just make sure that it’s descriptive and unique.  Have available a paper copy of your Trial Balance (report 2-1-0-21) for Period 12 of the year you will be archiving for reference purposes. Finally, create two backup copies of the current company data folders before starting the actual archiving process.

Now the easy part – as Supervisor with Exclusive Access, go to menu 1-6, select Archive Fiscal Year 20xx.  That selection button will display the oldest fiscal year available in your current company.  Follow all the instructions therein, reading and understanding each of the prompts.

If you have any questions or concerns or if you want help with the archiving process, give Mathieson Consulting, LLC a call!

Don’t Forget Scheduling!

Smart contractors realize that projects that take too long to complete often experience cost slippage, where actual costs exceed the original planned cost.  Cost slippage on fixed price jobs falls straight to the bottom line.  Cost slippage and delays on time and materials billing jobs may not show up directly in financial performance, but can cause customer dissatisfaction which will erode reputation and have a negative effect on the bottom line over time.

A scheduling program can help orchestrate the intricate plan of an efficient project by identifying:

• The work or tasks required to complete a project, and estimating how many days it should take to perform the tasks 
• The resources needed to complete those tasks, whether employees, equipment or subcontractors
• The ordering of materials, especially those that must be special ordered and may have long lead time
• The arranging for inspections required by building codes
• The timing of billings, especially those dependent upon specified milestones in the project’s completion

A schedule should take into account the order in which tasks must be performed, which tasks must be completed before the next can be started, and which tasks can be performed simultaneously. In some organizations, the availability of resources such as specific employees, subcontractors or equipment may be limited and if they are assigned to another project, the schedule for this project may be affected as well, so resource planning and conflict identification can be important.  Contractors that are consistent and effective schedulers find that their subcontractors and employees appreciate knowing when they are expected to perform tasks and how long they have to perform them.  By periodically updating schedules, contractors can identify changes to the original schedule resulting from taking more or less time than planned for completed tasks and project new task starting times for subsequent tasks.  Effective project managers can then promptly notify resources assigned to these subsequent tasks of these changes and help them adjust their own schedules.

I often find that managers of my clients are surprised to find that Sage 100 Contractor has had an effective scheduling module built in to the core system for many years!  They are looking to acquire a scheduling program when they have had one in their office for as long as they’ve had Sage100 Contractor and its predecessors.

Scheduling can be quite complex, between building task lists, estimating task durations, identifying and defining task predecessors, estimating lead and lag times and putting it all together into a coherent schedule.  Scheduling is one of the many processes that usually isn’t perfect “out of the box” and benefits greatly from ongoing refinements gleaned from job autopsies.

Contact us for assistance and more information about the scheduling module.

What Do Your Workers Cost?

Smart contractors make sure they are accounting for all possible costs when estimating the cost and bid price for a project.  One area where the cost isn't always readily apparent is the cost of labor.  While estimating the number of hours it takes to perform work is where an experienced estimator earns his or her keep, it is equally important to make sure that the hourly cost of performing that work is truly accurate and all inclusive.  Everyone understands that the gross wage one pays a worker is included in the hourly cost, and most also understand that payroll taxes and workers compensation insurance should be included as labor burden added to the gross wage.  However, smart contractors look at ALL costs of employing a worker when estimating the cost of performing a project.  Costs that vary with employment activity (or the incremental cost of putting a worker in the field) that are too often overlooked as components of labor burden may include:

• Liability insurance
• Employer’s cost of health and other employee benefit insurances
• Employer’s portion of contributions to retirement plans
• Estimated cost of providing company owned vehicles
• Allowances paid to employees for use of their privately owned vehicle
• Estimated cost of providing company owned mobile devices
• Allowances paid to employees for use of their privately owned mobile devices
• Estimated cost of providing uniforms
• Estimated employer’s cost of training, licensing and certifications
• Estimated cost of providing paid time off, including vacations, holidays, sick leave and any other paid time off
• Estimated cost of providing items too numerous and individually too inexpensive to specifically job cost when purchased, but which can become significant over time, such as small tools and supplies for production
• Estimated supervisory costs that are not being directly job costed

The above list may not be complete, and may vary from contractor to contractor.

Some estimators will go to great lengths to develop a comprehensive cost of employing production staff and use it quite effectively in their estimating and job cost budgets, only to find that the accounting department, in job costing their payroll costs, does not recognize and account for the same components of labor burden.  This creates a built-in price variance when analyzing budgets versus actual costs. 

For example, let’s assume that the estimator correctly predicted that work will take 100 hours to complete, and estimated that the true cost of the employees doing the work (including all possible labor burdens) was $45 per hour.  The accounting department’s payroll calculations only include and job cost the gross wages, payroll taxes and workers compensation insurance, which adds up to $28 per hour.  The job cost budget shows 100 hours with a total cost of $4,500, while the actual cost to date shows 100 hours with a total cost of $2,800.  It is misleading to say that actual costs beat the budget by $1,700 when the estimated hours were spot-on!  That $1,700 difference is a price variance.  Consider the same project, except that actual results were 160 hours, job costed at $28 per hour.  The budget versus actual report shows actual labor costs of $4,480 versus the budget of $4,500. It looks like the work was performed on budget, but it actually took 60% more time to do the work than estimated!

Clearly, it is important to prepare budgets and job cost reports consistently and comparably.  Budget versus actual reporting should avoid built-in variances and show how production is really doing in light of the estimator’s plan.

Fortunately, the payroll system of Sage 100 Contractor was designed for the specific and unique needs of contractors.  Payroll calculations can be designed to include all such labor burdens as mentioned above in the cost of employing workers.  Additional labor burden costs can be calculated as a percentage of gross pay, or per hour worked.  These payroll calculations effectively pull costs out of overhead expense accounts and make them part of job costs and direct expenses with very little effort once they are setup.

If you want to look more closely at how you are burdening your labor costs, or how to add payroll calculations that you know you should be including, give us a call.

Backups? I don’t need no stinking backups!

Now that I’ve got your attention, let’s talk about backups – effective backups. 

To most people, the title above sounds totally ridiculous.  Everyone knows you do need to back up your accounting data.  So many things can happen to your accounting data that may require a restoration of data from a recent backup – inadvertent deletion of data, interrupted posting processes that result in corrupted data, an ill-advised change in an accounting process or principle that is easier to “roll back” to an earlier state than to make correcting entries, or the dreaded virus or malware infection.

I’ve recently had several clients suffer from the CryptoLocker malware infection or a variation of it.  Someone in the office opens an email attachment that they shouldn’t, and before they know it, a malware program seeks out and encrypts database files on their network, rendering them totally useless.  The encryption is a strong encryption that is difficult for anyone to crack without a decryption key.  The extortionists that sent out the malware in the first place make a limited time offer to sell the decryption key, accepting bitcoin or some untraceable payment form for the ransom.

Paying the ransom is just wrong! It encourages other “evil-doers” and sets a bad example for your staff.  The correct solution to the problem is to clean the infected machines of the virus, and restore your data from backup data.  This is a moment of truth for your backup processes.  I have had at least two clients discover that there were no effective backups being done, even though they were told by their IT professionals that backups were being performed!  And several clients were down for more time than they should, waiting for their complicated backup restoration process to be performed.

Whether you get hit with the CryptoLocker malware infection or just need to restore from backup for some other less nefarious reason, don’t take the chance that your backup processes are faulty.  Insist that your IT professional demonstrate to you that backups are being performed consistently, completely and securely, and that the data can be restored from backup in a reasonable timeframe.  Make sure that the backups are insulated from your network so that a malware virus can’t infect the backup at the same time it’s infecting your live data.  Also, insist on a process to periodically copy off a permanent, archival copy of your data each month and keep then in safe storage for a year or more.

If you want further help with your backup processes, give us a call!

Archiving Fiscal Year Data and Purging Old Jobs

When Sage announced the Multiple Fiscal Year General Ledger capability in the release of Version 19, most clients were truly excited, as they no longer needed to archive off the ending fiscal year data before entering transactions for the new fiscal year.  Every year end I would get numerous calls from clients worried about how they were going to archive off the old fiscal year before they were ready, yet they had transactions to record for the new fiscal year.  Earlier versions of the program had a great facility for continuing to record data for most prior year transactions (period 0 postings), but there were challenges with operator errors and some types of transactions were not period 0 friendly. Thus, the Multiple Fiscal Year General Ledger capability of Version 19 was an exciting new feature!

It seems that most clients that upgraded to Version 19 are still working with two fiscal years in their general ledger.  While there is no requirement to archive off fiscal year data, and more than two fiscal years can coexist in the general ledger, eventually users will experience some processing speed issues. If you have completed all accounting for your earliest fiscal year in your general ledger, I recommend that you consider archiving that fiscal year, taking it out of the current general ledger.  What do I mean by having completed all accounting for your earliest fiscal year?  Generally, you will have received and entered any year end adjusting entries that your outside accountant may have provided and you or your outside accountant will have compared your adjusted trial balance as of the end of the fiscal year to the accountant’s published tax returns or financial statements and determined that everything is in agreement.  If that has been done, you can archive your fiscal year accounting data with confidence!

Users may also use this process to purge jobs and their related data from the current company.  Jobs must be marked with a status of Closed or Refused, and must not have any open accounts receivable or accounts payable invoices.  Users may also purge old Service Receivable records with a status of Paid or Completed and Closed Purchase Orders not tied to Jobs as part of the archiving process.

Archiving a fiscal year is accomplished through Menu 1-6 > Archive Fiscal Year 20xx.  The process is well automated and practically runs itself.  If you are uncertain, consider printing, reading and following the Year End Checklist, a 20 page document that can be found in the Home & Resources > Product Documentation menu.  Backup your data before you get started, just in case something appears to be a problem.  If you are still uncertain, call your favorite Sage 100 Contractor Certified Consultant to give you a hand.

Save Time with Project Work Center

So often, when working with a client to resolve a problem with one of their projects, I’ll jump to menu 6-12 Project Work Center and plug in the job number.  The client then stops me to ask what I’m doing. I realize that I have another opportunity to train users about the usefulness of the Project Work Center!

Project Work Center was designed with project managers in mind, bringing all areas of the program preloaded with the job number, into one central work area.  The best part of the project work center is that one gets a much more comprehensive view of the data related to a project.  If you look at Purchase Orders, your first screen is a complete list of all the purchase orders for the project, from which you can select and drill down into each record.  If you look at Subcontracts or Change Orders, in each case, you start with a complete list of all that data for the project and you can drill down from there!  Open Receivable Invoices/Credits and you see all receivable invoices related to the job.  Open Payable Invoices and you see all open payable invoices for the job.  Any report related to a specific job is preloaded with the job number to ease the process.  The right side of the project work center loads with a hot list of flagged items related to the project and summarized data about the project.  The menu structure on the left side can be customized to trim out menu items that are not used by a particular user.

Project Work Center, originally created for project managers, can be an invaluable tool when performing Job Autopsies, or whenever anyone needs to deal with one project at a time.

Call Mathieson Consulting for more information and training.

Use Templates to Ease Data Entry

The ability to create data entry templates has been available in the program for many years, yet I often find that users are not using templates because they were unaware of them or forgot that they existed! 

Templates help by reducing the amount of repetitive data that must be entered in a screen.  Take a look at data entry where you find yourself entering same or similar data over and over again or a type of transaction that you enter repeatedly.  Enter the repetitive data for a type of transaction and save it as a template in the “File>Save as Template” drop down menu.  Then, when beginning a repetitive transaction, go to “File>Load/Delete Template” and select the type of template you want to start entering.  You will see all the repetitive fields already completed and all you must then do in enter the non-repetitive data, review it and save it.

Templates in Sage 100 Contractor are found in most data entry screens, including

·         1-3 Journal Transactions

·         3-2 Receivable Invoices/Credits

·         3-5 Jobs (Accounts Receivable)

·         3-6 Receivable Clients

·         3-7 Progress Billings

·         3-8 Loan Draw Requests

·         3-9 Unitary Billing

·         3-10-1 T&M Billing Setup

·         4-2 Payable Invoices/Credits

·         4-4 Vendors (Accounts Payable)

·         4-7-3 Enter Credit Card Receipts

·         5-2-1 Employees

·         5-2-2 Payroll Records

·         5-5-1 Daily Payroll Entry

·         6-4-1 Change Orders

·         6-6-1 Purchase Orders

·         6-7-1 Subcontracts

·         6-11-1 Requests for Proposal

·         6-11-2 Requests for Information

·         6-11-3 Transmittals

·         6-11-4 Submittals

·         6-11-5 Plan Records

·         6-11-6 Daily Field Reports

·         6-11-7 Punch Lists

·         6-11-8 Correspondence

·         8-3 Equipment

·         9-2 Parts

·         9-3 Assemblies

·         11-2 Work Orders/Invoices/Credits

·         12-2 Inventory Allocation

For assistance in the creation and use of templates, give us a call.

How Can Sage 100 Contractor Help the HR Function?

When one scans the Sage 100 Contractor menus and data screens, there is only one menu item that explicitly describes itself as pertaining to the Human Resources functions in a company – Menu 5-3-9 HR Forms.  While this menu item is potentially a great aid to generating the various forms and documents that may be needed to properly communicate between employer, applicants, employees and various government agencies, it is by no means the only part of the program that can aid in Human Resources functions.  With a little imagination, we can provide significant support for many of the requirements of a Human Resources department:

• The 5-2-1 Employee record should be the central repository for all employee data, from the obvious information like pay rates, address, social security number, phone numbers, email address and the like, to a separate table for an unlimited number of contact people for each employee.  Don’t overlook the ability to track the accrual and use of Sick Leave and Vacation hours.  There are also several fields that can be relabeled and repurposed to meet specific needs.
• The Employee Licenses table can be used to track Drivers Licenses and Trade Licenses that have expiration dates.  Consider what other licenses you might need to track – think of an expiring Resident Alien or Employment Authorization card as a License to Work….  Never lose track of the fact that an alien worker may no longer be eligible to be employed if they haven’t renewed their paperwork and given you proof of the extension. 
• The Employee Training table can be used to track various training opportunities, especially those safety trainings and certifications that need to be redone periodically.  Consider other “training” opportunities that should be revisited periodically – think of a regular performance review or a regular compensation review as training opportunities.  By properly configuring the training item, one can track when the last training occurred, when the next training should occur, and keep notes as to what occurred during the training.
• Attachments to the Employee record are often overlooked.  Scan the employee resume or application, tax forms, form I-9, other employment packet forms, an employee photo, and anything else that can be reduced to an electronic file and attach it to the employee record so that it is always instantly available for reference.
• Use Alerts Manager to create periodic automatic queries of Employee data to identify areas that need attention this week, or this month or next month.  If the data is maintained in the database, it is likely that we can configure Alerts Manager to notify the appropriate personnel that an important action is about to require attention.

If you would like help with implementing any of the functions, give us a call at 480-471-5305.

How to Avoid Giving Up

In another venue, someone asked for advice to several construction company clients that were considering giving up and closing shop in the face of a sustained downturn.  After some thought, I posted this response:

The downturn has been different in different parts of the country. Many areas perceive that the downturn is over and business is picking up, but that may not be the case in your region.
What makes a survivor? There are as many answers as there are listeners. My thoughts:

• Survivors sensed the downturn early and acted on it promptly. 

• Survivors trimmed staff quickly. Keeping on people for whom you have no work jeopardized the lives and livelihoods of those that you do keep on. Too many times, the people that you kept on during bad times were the first to go out on their own or jump to a competitor as soon as things get going again. 

• Survivors were acutely self-aware – they knew what they were good at; knew whether or not what they were good at would continue to be in demand during the downturn (buggy whip manufacturer scenario); and they had a good sense of their regional marketplace. 

• Survivors were acutely aware of their cost structure – they understood their direct and overhead costs and how those would be affected by volume. They knew how much they had to markup direct costs to cover their overhead and never, ever, dropped below that markup rate. They might take a job to cover overhead and forego profit, but they never, ever, knowingly take jobs at a loss. Just make sure that sufficient owners’ compensation is included in the overhead number! 

• The ability to accurately estimate costs and mark them up sufficiently, coupled with the ability to produce the work without cost slippage is the single greatest predictor of success. Don’t ever forget that! 

• Always take what used to be called a Zero-Based Budgeting approach. Always ask whether an overhead cost is necessary or can be done without. Always assess the returning value of expenditures – will they result in benefit to the company. Marketing is not an unnecessary expense! If you spend your marketing dollars effectively (there’s the rub), it will be a significant benefit to the company in the long run.

Some may suggest that I failed to really answer the question.  What would your suggestion have been? 

Let Your Software Help During the Construction Boom

Sage 100 Contractor is chock full of useful and time saving tools!  Consider implementing (or fine tuning) the following features:

• Track vendor and subcontractor insurance certificates (also good for tracking contractor license expirations and annual subcontractor agreements).
• Prepare fully executable subcontract agreements from within the system, whether each subcontract is a complete, free standing agreement, or a short form work order pursuant to an annual (or multiple year) subcontract agreement.  Include a prefilled application for payment form with the subcontract or work order.
• Prepare complete and effective purchase orders to ease materials purchasing and subsequent payables processing.
• Use Document Management to prepare and track in one place
• Requests for Proposals
• Requests for Information
• Transmittals
• Submittals
• Daily Field Reports
• Punch Lists
• Project Correspondence
• Consider using Scheduling to plan work and keep all subcontractors, staff, and clients apprised of project status.  When subcontractors and staff know when they are expected to complete their work, their satisfaction improves and subs in particular may be more willing to work with you.   Profits tend to improve drastically when projects are completed timely.

Your friendly Certified Consultant can help you put these tools to good use!

Estimating for the Construction Boom

Many contractors cut back significantly when business slowed down, which may have had a profound effect on their labor costs, production rates and overhead structure and may have caused a change in the markups used in estimating. 

What happens when things start to boom?  You may experience a sudden increase in business, and start to scramble to find workers and managers.  You may have to add overhead to support the increased volume. There have been significant labor shortages recently – will you have to pay more in wages and benefits than in the past to find qualified workers?  Contractors must carefully consider their labor and overhead structure and consider revising their production rates and overhead markup when pricing work that will be done during the boom times.  Keep an eye on your materials costs and know that a boom can cause shortages and upward price pressure.  This will help keep you profitable and competitive going forward.

What IS Project Management?

Recently clients have asked what Sage 100 Contractor can do for Project Management.  My usually annoying response is “What do you want Sage 100 Contractor to do for your organization?”  Too often they don’t give a solid response to the question nor clearly define what they want.  I then guide them to think of Project Management in two generalities: 

• Tools to help project managers do their job, and
• Tools that help owners and senior management know what’s going on in the field.

Sage 100 Contractor tools for project managers include

• Scheduling – A CPM based program with a graphical user interface can assign multiple predecessors to any task with appropriate lead or lag time, assign employee, equipment and subcontractor resources to any task, and most importantly, has multiple notification reports.
• Dispatch Board – A component of the Service Receivables module provides another graphical user interface for assigning and dispatching work orders to employees or subcontractors.
• Communication Tools – Requests for Information, Correspondence, Transmittals, Submittals, Daily Field Reports, and Punch Lists are all available in the Document Control module.  Everything is located in one central location and organized by job.
• Job Cost Reporting – Classic job cost reports give project managers great insight into how the cost of the project (both cost to date and projected cost at completion) compare with the original and current job cost budget.
• Change Order Control – Changes to the job are accurately documented, estimated and priced to ensure that all changes are requested and negotiated by the project manager with your client.  Changes requested and changes approved are available at any time, and contract value and job cost budgets are updated as soon as change orders are approved. 
• Customizable Dashboards and Alerts – Project managers can have summarized and exception-based reporting of project related data on user defined onscreen dashboards.  They can also receive alerts about exception conditions in emails or on their own customized dashboard.

Sage 100 Contractor tools for owners and senior managers include:

• Transparency – The entire program is a centralized location to drill into everything that project managers are doing (see the project manager tools listed above.)
• Top Down Views – Summarized reports of job progress are available to identify problem projects that need further attention.
• Dashboards and Alerts – Customizable dashboards and alerts can direct attention to problems as they arise.

Don’t forget that all of these tools can be accessed in the office or remotely, either remote connections to your own workstation or server, or as a remote connection to an application hosting service like TimberCloud!  Remote connection applications are now available for most mobile devices.

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.