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.

Time to Prepare for Year End – Payroll

The multi-year functionality in the Version 19.2 upgrade will have a huge impact on the timing of the General Ledger fiscal year end closing.  However, it does not change the need to close payroll timely at the end of the calendar year or the need to file Form W-2 during the month of January.  With that in mind, it is not too early to start looking at your payroll data to ensure a smooth calendar year end closing.

If you are responsible for filing your Forms W-2 and payroll tax returns (i.e., you’re not using an outside payroll service like PayChex, ADP, or a PEO or “employee leasing” arrangement), ensure that you have current and complete names, addresses and social security numbers for all employees in their 5-2-1 records.  Run payroll audits more frequently between now and the end of the year, and identify and correct problems. 

Even if you are not responsible for filing your own payroll taxes, it is always a good idea to reconcile payroll checking accounts and review items not clearing the bank for problems that may affect reported payrolls.

Time to Prepare for Year End – Vendors and Form 1099

The multi-year functionality in the Version 19.2 upgrade will have a huge impact on the timing of the General Ledger fiscal year end closing.  However, it does not change the need to file Forms 1099 during the month of January.  With that in mind, it is not too early to start looking at your vendor records to ensure a smooth calendar year end closing.

Review vendors to identify those that should receive a Form 1099.  Payments that total $600 or more per calendar year to individuals, partnerships, and limited liability companies should typically be reported on a Form 1099.  Payers should seek and retain a completed and signed Form W-9 from each vendor that may be subject to reporting on Form 1099.  The Form W-9 clarifies the vendor’s status and provides the payer with the vendor’s Federal Employer Identification Number, correct legal name and address.

Review vendors’ records in menu 4-4 for company name, owner’s name, address, 1099 Type, and Federal ID# (including formatting as either XX-XXXXXXX for FEI# or XXX-XX-XXXX for SS#). Now is the time to get rid of all 1099 Types 0-Undetermined.  Based on data from the vendor’s signed Form W-9, identify the proper 1099 Type – 1-Miscellaneous for vendors that are not individuals or sole proprietors that may need to receive a Form 1099, 2-Rent for vendors that receive rent payments, 3-Interest for recipients of interest payments, 4-Sole Proprietor for individuals and sole proprietors, or 5-No 1099 for corporations and other recipients that payers are not required to report payments on Form 1099.  Do not worry about whether a vendor will have received $600 or more during a calendar year – the program will handle that for you.

Year End Closing with Version 19

Users under tech support contracts will soon be notified that Version 19.2 will be available for download and installation.  No, you didn't miss version 19.1 – that version number was taken by the Canadian version of the program.  Version 19.2 will contain significant benefits for a number of clients, and I strongly encourage users to consider installing this update before the end of their fiscal year.  Major changes include a multi-year general ledger process, several state-specific certified payroll reports, and automatic notification of the availability of program updates through the Sage Advisor Update program.

Multi-year General Ledger

In the past, fiscal year end closing was often a stressful time, because accounting departments had to hustle to get transactions caught up to date before the fiscal year end had to close.  Transactions of any type for the new fiscal year could not be recorded until the old fiscal year was actually closed in the program.  Accounting staff had to understand how to post prior year transactions to period 0 when they had to enter transactions in the new year that belonged in the prior year.  A few types of transactions could not be posted cleanly through the period 0 functionality.  Correcting transactions recorded in the prior fiscal year sometimes presented unique challenges as well.

Version 19.2 will revolutionize the fiscal year end closing process! (How’s that for a dramatic exclamation from an accountant?) Users can now defer the closing of their old fiscal year until later in the new fiscal year.  They can wait until all prior year transactions and their outside accountant’s adjusting journal entries are recorded in the old fiscal year before closing the books and archiving the data for that fiscal year.  Extra care should be taken to “lock” posting periods as they pass, especially when the data is given to your outside accountants so they can perform their audit, accounting and tax preparation services and be assured that your balances won’t change after they have relied upon them.

This change requires a change in the database structure for tracking accounting periods. Accordingly, custom reports that are selected by period, rely on periods for calculations or which report out periods may not work!  If you have “mission critical” reports that rely on periods in any way, you may want to identify those reports and seek assistance in adjusting the reports as soon as you update to Version 19.2.  System Reports (those numbered 21 and higher) should work correctly – this warning is only for custom reports.

The multi-year general ledger change also eliminates the need to Reset Vendor 1099 Balances at the end of the calendar year.

The multi-year general ledger change DOES NOT ELIMINATE THE NEED TO PROMPTLY CLOSE PAYROLL AT THE END OF THE CALENDAR YEAR!  (More dramatic exclamations….) Users must record all payrolls for the closing calendar year, resolve all payroll audit issues, correct all employee information and be prepared to close their payroll year promptly after the last payroll of the old calendar year and before any payroll records are recorded for the new calendar year.

The governments (Federal and State) have not changed their filing deadlines, so January will be a busy month for accounting departments, filing W2s, 1099s, and various payroll tax returns.  Start preparing now so these tasks will be less stressful.  Sage did their part in giving you breathing room for the general ledger closing!

State-specific Certified Payroll Reports

A number of states have begun requiring that Certified Payroll Reports required for publicly funded construction be filed on that state’s specific form rather than the US Department of Labor’s Form WH-347.  Other states are not accepting paper reports and instead are requiring electronic filing.  Sage, working with their tax reporting partner Aatrix, has started the process of providing state-specific certified payroll reports, and also electronic filing of the same.  Initially the ten most frequently required state forms are being added, but they are working diligently to add all other state required certified payroll reports and expect to have all state requirements met by next spring.  The availability of the US Department of Labor WH-347 as well as all legacy certified payroll reports will not change.

Update Notifications with Sage Advisor Update

Sage Advisor Update will be installed with Version 19.2.  This service will function much like Microsoft’s Windows Update, comparing your current version with the latest update available according to Sage.  Users can configure Sage Advisor Update to merely periodically notify specified users of available updates by email, and optionally automatically download updates to make the updating process quicker.  

Customizing Your User Interface

A major focus of the Sage 100 Contractor program developers in recent years has been the improvement of the program’s User Interface – how you see and interact with the program. 

In the past, some users were frustrated with the single comprehensive System Menu that showed all menus, including those for modules that a user may not even own or to which access rights have not been granted.  The “My Menu” sidebar was added to give each user access only to those modules that are owned and those menu items to which access has been granted in the security setup.  Further modification can remove menu items that the user feels are unnecessary to do his or her job but to which he or she may still have security access.

The activity centers (the tabs across the top of the main desktop screen of the program) were added to organize the menu items and reports most likely to be needed for various roles within a construction organization.  For instance, a Project Manager might customize his or her desktop to default to the Projects activity center.  There, the desktop can have shortcuts to the various menu items and reports that a Project Manager uses most often, regardless of where they may be found in the menu structure.  Users can customize the desktop of any activity center further by drawing connecting lines to emphasize the workflow (like a flow chart) and drawing boxes around items to group like or related items.

If users find that they really prefer only their My Menu sidebar or their activity center tab, they can hide the other interface by using the Hide Menu and Settings buttons on the main desktop screen to eliminate the unwanted interface.

These customizations are unique to each user and workstation combination and can be copied from one user and workstation to another if desired.

Little Things That Can Save You Time

I often find users doing things the hard way.  Helpful tools are often hidden and too easily forgotten if they are not used regularly.

Grids (they look like a spreadsheet similar to Microsoft’s Excel) are found in many places within Sage 100 Contractor.  If a user places the cursor within any cell of the grid and then right clicks, a context-sensitive menu pops up.  The menu can vary from grid to grid and from column to column, but may include:

• Display Lookup Window       F5
• Display Quick List               F5
• Display Detail/Add Record    F6
• Display Pick List Window      F8
• Cut                                 Ctrl-X
• Copy                               Ctrl-C
• Paste                              Ctrl-V
• Insert Row
• Cut Row
• Clear All Rows
• Show/Hide Columns…
• Save Current Grid View
• Autofit All Columns
• Find…
• Enter Key Moves Right
• Enter Key Moves Down

The function key and control combination notations also serve as reminders of available keyboard short cuts.  Show/Hide Columns can help users customize which columns are shown or hidden to make data entry easier (or to help find a column that was previously hidden when it suddenly becomes necessary).  Column widths can be adjusted in the same fashion that columns can be adjusted in a spreadsheet, by clicking on the column header and then “grabbing and dragging” the right edge of the column header to the desired width.  Remember to Save Current Grid View after customizing a grid if you want that same customized grid to be there each time you open that screen.

Don’t forget that grids can be copied and pasted to and from spreadsheets with a few exceptions.  For instance, if a grid has a column that is programmed to display the result of a calculation (such as a total column that is the result of multiplying quantity times price), that column will not accept a pasting of data from a spreadsheet.

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.