Critical Version Information!

All users should plan on updating their Sage 100 Contractor program version to Version 19. Sage has advised that they will not support Versions 18 and earlier. Specifically, the Aatrix Tax Filing capabilities will not produce documents (think W-2s and 1099s) suitable for filing with Versions 18 and earlier. The program will likely produce documents, but they will be printed with a DRAFT watermark that makes them unsuitable for filing.

Version 19.5 will be available for download to users with current support contracts in mid-December.  This version will contain the latest Federal and State Income Tax Withholding Tables for 2015 and will include capabilities to assist with compliance with the Affordable Care Act.  DO NOT install this update until after you have completed all your 2014 payroll entries and closed your payroll year.

Year End Closing

Last month, I wrote about things that users can do to prepare for year end, particularly for preparation of W-2s and 1099s. There is still time to continue with your preparations, but now I want to talk about what users should do at the end of December.  With the functionalities added in Version 19, the tasks that must be done at the end of December are significantly fewer than were required in earlier versions of the program. 

The only thing a user must do at the end of December in Version 19 is close the payroll year. Payroll must be closed only after the last payroll record for 2014 is entered, computed, printed and posted and before any payroll record for 2015 is entered in menu 5-2-2.  Payroll data entered in 5-5-1 Daily Payroll or 6-11-6 Daily Field Reports or 11-2 Service Work Orders/Invoices/Credits will survive the Close Payroll Year process and be available for 2015 Payroll processing, but any entries in 5-2-2 Payroll Records will be removed during the Close Payroll Year process.

Follow the Year-End Checklists document found in the Product Documentation area of the drop-down menu of the Home and Resources Activity Center. I strongly encourage users to read through the document and then follow the check list in the order specified.  And above all else, BACK UP your data folder before you start!

Be aware that the Maximum Wages subject to FICA (Social Security) Tax in 2015 is $118,500, up from $117,000 in 2014. While the Version 19.5 update will update the Federal and State Income Tax Withholding tables, users are expected to update their FICA, FUTA, and State Unemployment payroll calculations and push the updated data to all employees.

Other than making sure your data is shipshape, there is little that needs to be done at the end of December for 1099s or your fiscal year end closing.  The 1099s should be processed and printed or E-Filed during January 2015, and your fiscal year end data should not be archived until all entries are made and finalized for 2014 and your balances tied back to published financial statements and tax returns.

Version Information

The current version of Sage 100 Contractor is still version 19.4.58, but in the past few days Sage has advised that it will only support version 19.5 (which won’t be available until mid-December) for the impending Year End. The 19.5 update will contain the 2015 Tax Tables.  Thus, be on the lookout for the version 19.5 in December and be ready to install it so that withholdings for 2015 Federal and State Income Taxes will be correctly calculated.

Time to Start Preparing for Year End!

It may not yet be Thanksgiving, but it’s not too early to start preparing for W-2s and 1099s that must be filed in January 2015.

Vendor Payments and 1099s

Most construction businesses will be required to report payments for services totaling more than $600 per year to recipients that are not specifically exempted from such reporting.  Exempted recipients include corporations (other than professional services corporations like doctors and lawyers), governmental agencies, non-profits, banks, and insurance carriers.  Individuals, sole proprietorships, partnerships, and limited liability companies are not exempt from 1099 reporting. Payments for merchandise (but not parts installed as part of a service provided), certain expense reimbursements to employees, and loan principal repayments do not need to be reported on a 1099.

There are a number of steps that you can take to ease your 1099 processing before the end of the year.

• Request a form W-9 from all vendors paid this year to ensure that you have proper names, addresses and Taxpayer ID numbers for vendors. The form also will provide the information needed to determine if a vendor is an entity exempt from 1099 reporting.  The current W-9 form can be downloaded from http://www.irs.gov/pub/irs-pdf/fw9.pdf.
• Review all vendors to ensure that they reflect the correct 1099 Type and if they are designated to receive a 1099 with types 1-Misc, 2-Rent, 3-Sole Proprietor, or 4-Interest, make sure you have the correct Name, Address and Taxpayer ID#. If a vendor is type 5-No 1099, it can’t hurt to have a valid Taxpayer ID#, but you are generally not required to collect one.
• There is no excuse for having a vendor with a 1099 Type of 0-Undetermined unless you have never paid the vendor!
• Review report 4-1-1-61 Vendor 1099 report to find problems or missing data.
• If you have questions about what payments are included in the 1099 balances, run report 4-1-5-61 Vendor 1099 Payments to see the details.
• If your Sage 100 Contractor information is incomplete for the calendar year (for instance you implemented during the year, you may need to adjust your data for payments made outside of Sage 100 Contractor.  Contact your friendly Sage Certified Consultant for more information about this special situation.

I strongly recommend that users not order 1099 forms or plan on in-house printing and mailing of 1099s to recipients and government agencies.  This tends to be more expensive than using the embedded Aatrix E-File service. Yes, there is a cost per recipient, but when one factors in the cost of acquiring the forms and envelopes, printing the forms, stuffing envelopes, affixing postage, and mailing the forms, the benefits of using the Aatrix E-File service become obvious.

Payroll and W-2s

If you prepare your payroll in house and will have to distribute W-2s to the governments and your employees, there are a few steps you can do to ease the process before the end of the year.

• Review all 5-2-1 Employee records for accuracy of employee names, social security numbers and addresses. 
• Be aware of any employees that may have received third party sick pay from a workers compensation insurer or a disability insurance provider and ensure that all reported third party sick pay data has been properly recorded in your payroll records.
• Run 5-3-7 Payroll Audit regularly and ensure that all audit errors are corrected.
• Review with your outside tax accountant whether any items of additional compensation must be added to employees’ total compensation, such as the cost of “excess” employee life insurance, the value of personal use of company owned vehicles, certain benefits provided to company owners, etc.  Such additional compensation can be properly reflected in your payroll records, but care should be taken to quantify the amounts and record them properly.

I strongly recommend that users not order W-2 forms or plan on printing and mailing W-2s to employees and government agencies.  This tends to be more expensive than using the embedded Aatrix E-File service. Yes, there is a cost per employee, but when one factors in the cost of acquiring the forms and envelopes, printing the forms, stuffing envelopes, affixing postage, and mailing the forms, the benefits of using the Aatrix E-File service become obvious.

Current Version of Sage 100 Contractor

The latest and greatest version of Sage 100 Contractor at the time of this posting is version 19.4.58. We bring you this as a public service, so that you may keep your program up to date and take advantage of the most recent features and functions.

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.

Current Version of Sage 100 Contractor

The latest and greatest version of Sage 100 Contractor at the time of this posting is version 19.4.52. We bring you this as a public service, so that you may keep your program up to date and take advantage of the most recent features and functions.