August 2015 Newsletter
Sage Summit 2015 – the Big Easy
“What happens in Vegas may stay in Vegas, but what happens in New Orleans, goes home with you.”
-“Laurell K. Hamilton.” BrainyQuote.com. Xplore Inc, 2015. 4 August 2015. http://www.brainyquote.com/quotes/quotes/l/laurellkh446068.html
What we’re talking about in August:
- Want the skinny on Sage Summit 2015? Links and opinions below.
- AGC Group reports construction spending up 12 Y-O-Y
- What is CRM, anyways?
- Sage Estimating special
- Tips and Tricks for Sage 100 CON, Sage 300 CRE and Sage Estimating
Sage Re-imagines Itself and Us
“Shut Up and Dance with Me” – Summit 2015 Review
(Links to recorded videos provided where available.)
Wow! What an experience Sage Summit 2015 turned out to be. Held in beautiful (and it’s a “wet heat”) New Orleans, LA (NOLA) Sage North America continues to “reimagine” the conference from older formats (product training and Death by PowerPoint) into the largest Small and Medium Businesses (SMB) conference in North America. While my commentary leans towards more to the opinion side than the editorial, here are some bona fide journalistic recaps for your perusal:
From AccountingToday: The Tech Take: Sage Summit’s Full Buffet
From ComputerWorld: Sage masters its marketing message, but is there substance there?
Partner Success Day
Monday, July 27th launched Partner Success Day. Stephen Kelly, the new Sage CEO, started off charmingly British (imagine David Bowie in a business suit and an expensive haircut) —by thanking the Sage Business Partners (that’s us) and promising more collaboration and communication in the future. This is a refreshing change of attitude from Corporate Sage, where previously BPs seem to be generally patronized and treated as a necessary link to reach users.
The second half of the session featured Himanshu Palsule, CTO of Product Strategy. Palsule, a crowd favorite, was unusually reserved this year (last year he did “selfies” with the audience and Jessica Alba). Palsule was tasked with introducing the “magic” that his team produced this year. Sage announced that they “are not going to FORCE you (customers) to migrate to the cloud.” In other words, it’s business as usual, with your technology hosted and supported on premise, in the cloud, or hybrid – whichever is your business preference. Good business strategy, Sage. Poor choice of words, however.
This was followed by the announcement that “Sage Live” (the new Sage/Salesforce CRM PaaS product) would be LIVE tomorrow and that Sage is “smashing down the walls between the front office and the back office.” No wonder Himanshu was off his game— the sound bites were marketing-speak and not technology driven.
I would be remiss if I were to glaze over Stephen Kelly’s Keynote address. “Customers for life” was the reiterated message. He was joined via satellite by the Salesforce President and Vice Chairman of Sales, Keith Block, and Microsoft CEO, Sataya Nadell who both congratulated Sage.
Kelly also dramatically launched Sage Live (cloud CRM) officially, Sage One (a micro business app), and he officially 86’d (dropped) the “ERP” in Sage X3 (ERP is a bad word in technology, evidently). And to be fair X3 is an easier, more flexible product than most massive, legacy ERP solutions.
As of last year, (and I have only been to three events), Sage starts the day with two-hour Keynote sessions including Featured Conversations with celebrities and business leaders sharing their stories, followed by product updates, new partnership announcements, and general marketing news. (Last year’s speakers featured Jessica Alba, Magic Johnson, and Biz Stone.)
To be honest, the Featured Conversations are my always my favorite part of the entire Summit experience.
On Tuesday, Customers (users) joined Partners and were treated to a conversation with General Colin Powell, USA (Ret.) and Deepak Chopra, best-selling Author and Physician.
The audience paid homage to General Powell with a standing ovation, and the love for Chopra was not far behind. Powell was amusingly self-deprecating, with a deep commitment to education. Chopra bottom-lined it for the audience, when he got roaring applause for his summation of what’s truly important in life, “love and service.” This session alone was worth the price of admission! Unfortunately, I have been unable to find a video link for this session.
Sporting the ubiquitous Millennial business look (jeans, jacket, scruffy beard, and a man bun), Hurley shared his Facebook-reminiscent story of how he wanted to just create a way to share videos with his friends. Due to coding disparities in media players and the immense size of files, Hurley and his team finally solved the problem of how to host universally-coded video files within a viewing platform — and YouTube was born. The growth was so meteoric he sold his company to Google within a year in order to use their global resources (servers and man power). His business advice to the audience was to be observant and find small insights; that it’s not about a big breakthrough or revelation – you just see something no one else has ever seen before and build from that insight.
My second favorite Featured Conversation was entitled “Down but not out” with Jane Seymour, award-winning actress, artist, author, designer and humanitarian; Brandi Temple, founder and CEO, Lolly Wolly Doodle; and Baroness Karren Brady, Government small business ambassador, CEO, Business Woman of the Year, BBC The Apprentice.
Each woman shared their personal and business challenges, failures and experiences facing adversities. Each story was remarkable, and Karren Brady was singularly “colorful” and hilarious in her description of facing gender bias when she purchased a football club (soccer) at the age of 23. (Office alert: wear headphones while playing her bit back!)
Finally, on Thursday, the first conversation, “Stay hungry. Stay Foolish.” was an odd mash-up of Bre Pettis, Chief innovation officer, cofounder, MakerBot Industries (affordable 3D printers); Dolly Singh, founder and CEO, Thesis Couture; and William A. McDonough, Chief executive, McDonough Innovation, and cofounder (with Brad Pitt) of the Make It Right Foundation. The Bloomberg moderator, Carol Massar, correctly described a “bromance” between Pettis and McDonough, and alluded often to Singh’s stint working for Elon Musk’s SpaceX.
Oddly enough, Singh’s current project is how to reinvent comfortable stiletto heels! Employing rocket scientists, astronauts and engineers, Singh is re-engineering the architecture (for taking the pain out) of high heels. Singh estimated the project would only take six months, and two years later, she’s now just close to going to market. Who knew ladies shoes were so challenging?
Best Singh quote, “When you work for Elon Musk, he does not take ‘No’ for an answer. Unless it defies a fundamental laws of physics, it can be done!”
McDonough, (channeling a Michael Keaton-esque mugging for the camera) lobbed bon mots to the audience. An advocate for greener, cleaner building and living (Cradle to Cradle Design), he dropped beauties like, “We sent a man to the moon before we put wheels on luggage?!” (And continued: “Then it took another ten years to add two more?”)
But make no mistake in taking this man lightly. He created a motorcycle factory in India that makes water out of air, and grows organic food on the roof!
Also responsible for the Ford Rouge River Complex in Detroit, McDonough renovated the factory to include a vegetarian-covered roof and a rainwater sustainability reclamation system. Brilliant and articulate, I imagined he was factoring polynomials while lecturing on the atrocities of man’s acts on nature. Captivating!
Bre Pettis was a little less articulately focused, but another genius among his co-panelists. His claim to fame and fortune was to invent an affordable 3D printer, the MakerBot. In his erratic, hirsute Nutty Professor kind of way, he claims (paraphrasing): prototypes have been democratized, software has been democratized and is accessible, electronics are accessible and democratized – and you can mix these things together with a small team and make something (without prototypes, business plans, and traditional development). And next big challenge is to ‘optimize manufacturing.’ Right??!
The last Featured Conversation, “Finding your fan base” was a rather strange mix of Matthew Weiner, award-winning creator, writer, and executive producer of Mad Men; Trevor Noah, Comedian and Comedy Central’s new host of The Daily Show; and Tony Hawk, Entrepreneur and professional skateboarder. They were interviewed by Sage EVP of Marketing, Gabie Boko (who made an “unusual” dancing entrance based on “Shut Up and Dance with Me”).
The implied correlation of this trio’s successes (fan bases) to Sage’s theme of ‘Customers for Life’was a bit of a stretch. Entertaining and amusing, yes. Whereas the conversation was of little business value, Matthew Weiner (also on the creative team for the Sopranos) and comedian Trevor Noah could hold their own, while Tony Hawk was clearly not an effusive business mentor. His love for skateboarding, however, resurrected a dying sport, launched a hugely successful brand and created a global fan base. Can’t ‘diss’ that!
The real takeaway for this session in a business sense, was the power of Social Media to create and engage in (or not to) relationships with customers.
The Best NON Featured Conversation
The “Fireside chat with Stephen Kelly, CEO, Sage, and Justin Packshaw” was awesome! I don’t know why this guy didn’t get center stage at a featured time, but Justin Packshaw with Stephen Kelly was double the Brits, double the fun.
The only rival for my crush on this modern-day explorer, philanthropist, and entrepreneur was Stephen Kelly himself. Packshaw regaled us with stories and breathtaking photos from his journeys to Mount Everest, and the North and South Poles. Describing the effect on your body from the heights and deprivation of oxygen, to tales of extreme heroics and acts of basic human generosity – this session was a cliff hanger (pun intended).
Dubbed a “two-part” series, the second day was mostly a re-run of the first. More bromance, same tales. I have to say I didn’t mind in the least.
The Ernest N. Morial in NOLA was huge. And COLD, very, very cold. As in layers of clothing, but still shivering cold.
And the (gratis) food was BAD. Very, very bad.
And the acoustics for the “open concept” sessions were LOUD. Very, very…you get it.
Sage Expo Floor
Navigation was laid out based on a hub with Sage Center surrounded by theaters based on business stages where appropriately themed sessions were held: Differentiate, Lead, Grow, and Profit.
Third-party vendors and Independent Software Vendors (ISVs) were located in a large, designated spot at the side of the hall, and easily accessible.
Lots of interactive booths were well organized across the floor, where customers can get live demos with Sage product experts, and even purchase some software there on the spot – a first for Sage Summit.
Summary: Slogans and Partnerships
Sage is doing a great marketing itself as a SMB supporter, with slogans like “Customers for Life” and “One Sage” and “Smashing down walls between the back and front office.” With its new partnership with Salesforce, Microsoft, and (ISVs), Sage seems on the precipice of planned growth.
In another major marketing product push, Sage’s announcement of shedding the moniker ERP on its Sage X3 product indicates heavy commitment to this line. Distancing itself from a perceived expensive, enterprise solution, Sage envisions X3 as a cloud-based solution “which gives mid-sized companies the power of the Sage flagship enterprise solution without sacrificing business agility for functionality and integration.’
Albeit, very humid, NOLA was a wonderful place to visit. With an extra day added to the trip, we managed to squeeze in a Riverboat tour, a really fun Segway tour (shout out to City Segway Tours), and a really delicious meal at Tableau (where we celebrated Ed Ledgerwood’s 60th birthday).
The Closing Celebration was moved from the Riverfront back to the Convention Center, as a summer storm was impending in the evening. That didn’t damper the networking and partying between Sage, partners, and customers! We caught a great snap of LAI president, Ed Ledgerwood with Sage Interim President Jodi Uecker, and Regional Sales Manager, Todd Juhnke!
Top off the experience with a Closing Celebration featuring Walk the Moon’s and their hit “Shut Up and Dance with Me.”
Great advice, if you ask me. Unofficially, of course.
What is CRM?
What exactly is “CRM?” – This is a question I’ve heard countless times over the past five or six years while advising businesses on how CRM can improve their practices and processes. CRM is a platform which brings together communication, data and processes, which in-turn, paves the way for efficiency and higher performance within a business.
Paul Greenberg, (author of the best-selling “CRM at the Speed of Light: Social CRM Strategies, Tools, and Techniques for Engaging Your Customers”) a thought leader – if not the thought leader – in the CRM space, defines it as follows:
CRM is a philosophy and a business strategy, supported by processes and a technology, designed to improve human interactions in a business environment.
So what? How can CRM improve your business?
There are three areas that CRM has been proven successful, with a multitude of evidence supported by thousands of independently-conducted research: Sales, Marketing, and Customer Service. While one or more of these more “high-level” areas may or may not initially seem like something you might care a lot about, consider the following:
How do you and your team stay “in sync” on combining details for both new and existing projects, developing new business, resolving customer concerns, and predicting how these all might be improved? Do any individuals possess more information related to “their customers” or “their projects” than others? Do you ever find yourself wondering what would happen if a key member of your team disappeared tomorrow, without a chance to provide any transfer of knowledge on what they have done, or what they’re currently working on? Do you find that you’re spending an unacceptable time getting “up-to-speed” with customers or colleagues, either in team meetings or individually?
How do you capture the information you need to run your business, and what kind of media do you use to log it? Do you use word-of-mouth? Notebooks and sticky-notes? Word processing programs or spreadsheet software? Accounting software? Using the various types of media capturing all of this pertinent information – are you able to compile it all to get meaningful insight on critical business information to measure and improve?
Do you struggle to gain insight into how your business development is performing? Can you easily determine your bid win/loss ratios? Are you spending hours every week tracking multiple bid processes, with limited visibility on which you’re more statistically likely to win, and at what price-point? Do you know who your top 5 most valuable customers are, by profitability?
When looking at your business data each month, quarter or year– are your target areas improving, failing or are they stagnant? Do other key members of your team have all of the information they need in order to perform at their best? Finally, is the data-gathering process a relatively painless accomplishment, gauging a “snapshot” of each of these types of metrics, or do you find that it’s difficult to gather all of the data into one place? Do you have metrics in place to monitor your key business concerns, and revisit them regularly to know when to “adjust?”
Are you using a standard methodology to encourage staff to perform job tasks and functions in the same way, using the same tools, across the various departments and teams within your organization? Do you have an easy way of tracking each of these methods to effectively measure specific activity within your business and to “raise the bar,” or even be able to predict where the same activity and performance places you in your market well into the future? How frequently do you go back and revisit these areas to constantly improve, staying in touch with both your employees and customers, and overall, being competitive in the marketplace?
Sage CRM allows businesses of any size to bring together each of these three key areas of their business. Communication between company-and-customer are easily captured and logged, and is viewable by any member of your team needing access to it, at any time. Tasks and activities with clients are tracked and captured easily, providing valuable insight as to what type of client you’re working with, how “hot” a particular lead is, and when to discuss what with them next. Data from many different sources can be centralized into a single view, providing real-time insight on sales projections, project status, scheduling, and issues, bid progress, and so much more. Sage CRM integrates with the accounting software you are already using today, eliminating duplication of effort for data entry, and giving you an even better picture of how the pulse of your business is performing. Sage CRM truly is a platform that is customizable to meet your needs, fit your market, to improve your business.
Over 12,000 small- and medium-sized organizations in 70 countries use the award-winning Sage CRM platform every day, to manage critical sales, marketing, and customer service activities. We would love to have a conversation with you to discuss how it could benefit your business. Call or email us today to learn more!
The Sage Summit Customer Panel on CRM
B2BNewsNetwork did an excellent write-up on a CRM session at Summit entitled, ” “How customer relations management overcame sales/marketing challenges.” Panelists for this session included: Hugo Fueglein, director of strategy and business development, RM2 (New Jersey); Ruben Thanaruban, Assistant Director of Information Technology, Ontario Real Estate Association (Toronto); Karen Zfaty, Public Agency Retirement Services, Director, Marketing Info Systems (California); Andy Klinger, Communications director, Marceco (Michigan).
The gem from the summary is a quote from Karen Zfaty:
To any CEO, I would say that having a clean database that tracks who your clients and prospects are, what you have done in the past, what you are doing currently, and helps show what and where you should be doing business is critical.
Want to Kick the Tires?
Sage offers a free, full access thirty day trial. Find out how Sage CRM can grow your business! If you have questions, call JR at Ledgerwood directly at 480-423-8300 or sign up here.
Standard Estimating vs. Extended – Apples to Apples Webinar
Join LAI’s Tony Merry on Wednesday, August 12th as he goes “apples to apples” and demonstrates the functions and differences in the two Sage estimating products.
- Do you need crews, resources and rates tables?
- Have you grown to need more than one user-definded WBS level?
- Want to compare multiple estimates?
Learn more from Tony – because he’s USED the software. Pick his brain in this interactive session! REGISTER HERE.
Want more power? Sage is currently offering half off the difference to upgrade from Standard to Extended Estimating! Click HERE for pricing or to order!
Don’t forget to forward your newsletter to a friend, and follow us on Social Media for immediate construction and technology news!
Twitter | Facebook | LinkedIn LAI Page | LAI Sage 300 CRE Users Group
Upcoming LAI Online Training and Networking Events:
Want to see eSUB in action? Join LAI and eSUB for this online event!
Free webinar, December 17, 11:00 am, MST
Join eSUB and LAI as we show you how to improve field to office collaboration with testimony and case study from a large trade contractor. Learn more about Sage 300 CRE + eSUB, the leading field data collection and project management platform purpose-built for trade contractors.
You will learn how to:
- Capture jobsite activity from a mobile device to keep the office team up-to-date in real-time
- Integrate operations and financial systems to reduce manual data entry and increase accuracy
- Establish best practices to standardize operations and improve efficiency
eSUB is THE field data collection and operations platform designed specifically for subcontractors. Built on 30-plus years of expertise, eSUB’s mobile-first, cloud-based project management platform captures valuable project data to help self-performing contractors increase standardization, accountability, and productivity.
Our guest presenter, Benny Baltrotsky, is the Chief Strategy Officer of eSUB Construction Software. Because eSUB integrates with many different solutions including Sage 300 CRE, Benny is passionate about integrations. He is also a founding member of the Construction Open Standards Alliance and Board Member of the Construction Progress Coalition, non-profit organizations dedicated to providing a framework to help develop open data standards in construction.
Year End Close Out Procedures
Join an LAI consultant for a live, online FREE session.
Register here: https://attendee.gototraining.com/r/5275628714865636866
The Excel Conundrum
Sage Office Connector webinar
Excel is arguably the most widely used business application software on the planet. So why do advocates prefer to use it? Why do naysayers argue against using it?
Join us for this informative session and discover how Sage Office Connector can transform Excel, increasing how useful it is to your business while eliminating arguments against your use of easy to use yet immensely powerful technology.
We will show you how Sage Office Connector can streamline your reporting and analysis, improve the way you share vital business information and significantly enhance manual processes that may be tedious and prone to error. You will not only save hours of time preparing the Excel workbooks you currently rely upon, but you will also begin to see why thousands of Sage customers and tens of thousands of your peers utilize this powerful yet affordable technology to improve the way they use and share information.
What we’ll cover:
- Excel-based reporting
- Analysis and process enhancement
Join us for an informative presentation of the top reporting tool available for Sage Estimating, SQL Edition.
Learn how to:
- Create itemized proposals in Excel
- Explore your spreadsheet
- Create a summary of your group cost codes
- Drill into the details including subcontractor and supplier details
- View interactive estimate
- Excel-based view of the estimate sheet for Sage Estimating
- Utilize Excel capability for functions, filter, sort, subtotal, copy/paste and more
In addition to the reports on the Liberty Reports LaunchPad, learn how you can design your own Excel-based report.
Sage is excited to announce “Buyout for SQL Estimating.”
See how the new Buyout module works allowing you to “buyout” your estimate to different vendors and then create Purchase Orders and Subcontracts for those items.
Event 1 Webinar
The construction season is fast approaching!
Join us for this informative presentation and learn how you can gain greater control over your projects, better communication between the field and office and higher confidence from your Surety by creating integrated project cost forecasting that backs up your Work in Progress reporting using Sage Office Connector.
A Little Imagination: A Reversed PO
Submitted by Walt Mathieson, Certified Sage 100 Consultant
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 a 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, re-purposed a user-defined field for the vendor’s RMA or returned material authorization number, and re-purposed 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, contact your Sage 100 Contractor Certified Consultant.
Current Version Information
The latest version of Sage 100 Contractor is version 19.6.41, the release of which was announced on May 28, 2015.
More about Sage 100 Contractor here. Call Ledgerwood Associates at 877-918-8301 today and we’ll match your needs to the best solution.
Email Walt at firstname.lastname@example.org.
Unposted AP Transactions in GL
Submitted by Kyle Zeigler, Sage Senior Certified Consultant
Clean Up Time!
A common month-end issue for controllers and accounting managers in their Sage 300 CRE software is the cleanup of unposted Accounts Payable transactions in General Ledger. A month-end best practice is to post GL entries and review the posting journal to determine what entries didn’t post. Entries from AP that won’t post are often reversing entries with accounting dates in prior closed periods. These entries occur when AP users make changes to invoices and don’t change accounting dates to the current period.
When using AP > Tasks > Change Invoices, users should take into consideration the accounting date on the invoice or, in cases where no accounting date is entered, the invoice date (with this setup, if the user doesn’t enter the accounting date, the invoice date is used as the accounting date). If the accounting date on the invoice is in a prior accounting period, the user should determine if the change should be made in the prior period or if the change should be made in the current period. For companies with strict month-end closing procedures, changes to prior periods are generally avoided, unless a change to the prior period financial statements is intended.
When AP users opt to change the accounting date on the invoice, make the change and accept the invoice, a window will pop up that informs the user that the accounting date has changed. The user is then asked, “Which date should be used to reverse the original invoice information?” The choices presented and their effects on GL are:
- Original accounting date – Choosing this option posts the reversing entry to GL using the original invoice accounting date. For example, if the original invoice has a 1/1/15 accounting date and you change it to 3/15/15, the reversing entry is posted to GL with a 1/1/15 accounting date when using this option. If January is a closed period, this entry will not post to GL unless January is reopened.
- Specified accounting date – Choosing this option posts the reversing entry to GL using the accounting date you just entered. For example, if the original invoice has a 1/1/015 accounting date and you change it to 3/15/015, the reversing entry is posted to GL with a 3/15/015 accounting date when using this option. If March is a closed period, this entry will not post to GL unless March is reopened.
Chronic problems with unposted AP transactions in GL can often be resolved with additional AP user training, making the month-end closing process smoother and less time-consuming. For assistance with cleanup of unposted transactions see the Sage Knowledgebase or contact your local Sage business partner.
DOL Gets Tough on Independent Contractor Classification
Submitted by Bryan Eto, CPA
“The Department of Labor’s Wage and Hour Division (WHD) continues to receive numerous complaints from workers alleging misclassification, and the Department continues to bring successful enforcement actions against employers who misclassify workers,” said a detailed document issued July 15th.
The Administrator’s Interpretation 2015-1 is from David Weil, who heads the WHD. It elaborates on positions the agency has taken earlier on the employee versus independent contractor issue, citing many federal courts’ interpretations of the Fair Labor Standards Act (FLSA).
Noting that the matter of improper classification requires a “multi-pronged approach,” the WHD is working with the IRS and states to tackle misclassification.
Weil notes that the origin of legal definitions of employee came from state laws intended to stamp out unlawful child labor. Employers in the early 20th Century sought to circumvent child labor laws by having middlemen do the hiring and supervising of child laborers. Those employers then claimed to be unaware that children were doing the work.
“Economic Realities Test”
Over time, the definition of an employee evolved into a series of six factors based on an “economic realities test.” At the heart of the factors is “whether the worker is economically dependent on the employer or in business for him or herself.” The Administrator’s Interpretation also states that, while all of the factors must be considered in each case, no one factor is determinative of whether a worker is an employee — not even the “control” factor (See “What is the Nature and Degree of the Employer’s Control?” below.)
The WHD warns against applying the factors “in a mechanical fashion.” Rather, they should be applied “with an understanding that the factors are indicators of the broader concept of economic dependence.”
The Six Factors
Here are the six basic factors and how the WHD views their scope (though the agency cautions that some courts may consider other factors).
- Is the Work an Integral Part of the Employer’s Business?
The more essential the work is, the more likely the worker is to be economically dependent on the employer. It doesn’t matter how many workers perform a particular task.WHD uses the example of a call center. Answering calls is integral to a call center’s business “even if it is performed away from the employer’s premises, or at the worker’s home.”Similarly, the work of a carpenter framing houses for a homebuilder is integral to the business. In contrast, work performed by a software developer on behalf of the same company on a program that “assists the company in tracking its bids, scheduling projects and crews” would not be integral to the business.
- Does the Worker’s Managerial Skill Affect His or Her Opportunity for Profit or Loss?
This gets at the question of whether the individual is truly running a business. For example, “a worker’s decision to hire others, purchase materials and equipment, advertise, rent space, and manage time tables may reflect skills” that impact profit or loss, the WHD document states. If the worker’s only way to affect earnings is deciding how many hours to work, that would indicate an employment relationship.The document illustrates the principle by describing a worker who provides cleaning services for corporate clients. The individual “performs assignments only as determined by a cleaning company, does not independently schedule assignments, solicit additional work from other clients, advertise his services or endeavor to reduce costs.” This appears to be an employment relationship.
On the other hand, if the worker does tasks such as negotiating contracts and deciding which jobs to perform and when, his exercise of such managerial skills is indicative of an independent contractor.
- How Does the Worker’s Relative Investment Compare to the Employer’s Investment?
“The investment of a true independent contractor might … further the business’s capacity to expand, reduce its cost structure, or extend the reach of the independent contractor’s market,” the document states. WHD again illustrates the principle with an example from a cleaning business.
A company provides insurance, a vehicle and “all equipment and supplies” for the worker, does advertising for her and finds clients for her, yet classifies her as an independent contractor. Based on the size of the investment of the company, the company is likely her employer. Even if she occasionally brings some of her own preferred cleaning supplies, her investment must be compared to the company’s investment.If, instead, the worker “invests in a vehicle that is not suitable for personal use and uses it to travel to various work sites … rents his or her own space to store the vehicle and materials … [and] advertises and markets her services and hires a helper for larger jobs,” that would support independent contractor status.
- Does the Work Performed Require Special Skill and Initiative?
“A worker’s business skills, judgment, and initiative, not his or her technical skills, will aid in determining whether the worker is economically independent,” declares the WHD document. How does that play out? The WHD offers the example of a “highly skilled” carpenter who provides services for a construction company. He doesn’t choose his job site, the sequence of his work, order additional materials “or think about bidding the next job.” This fact pattern doesn’t support independent contractor status.
In contrast, a carpenter who “provides a specialized service for a variety of area construction companies, for example, custom handcrafted cabinets that are made-to-order, may be demonstrating the skill and initiative of an independent contractor,” the WHD opines.
- Is the Relationship between the Worker and the Employer Permanent or Indefinite?
Naturally, the more “permanent” the relationship appears, the more it looks like an employment relationship. But “permanent” doesn’t have to involve years.
“Even if the working relationship lasts weeks or months instead of years,” the document states, “there is likely some permanence or indefiniteness to it as compared to an independent contractor, who typically works on one project for an employer and does not necessarily work continuously or repeatedly for an employer.”
However, the WHD cautions that the lack of permanence doesn’t necessarily indicate independent contractor status. The key “is whether the lack of permanence or indefiniteness is due to operational characteristics intrinsic to the industry.” For example, sporadic part-time work assignments provided directly by companies or staffing agencies doesn’t preclude an employment relationship.
- What is the Nature and Degree of the Employer’s Control?
This assessment should be made “in light of the ultimate determination whether the worker is economically dependent on the employer, or truly an independent businessperson,” according to the document. The worker “must control meaningful aspects of the work performed such that it is possible to view the worker as a person conducting his or her own business.”
Moreover, that control can’t just be theoretical. “The worker must actually exercise it” the WHD states.
Labels Don’t Matter
Relationship status depends on the economic realities, the WHD stresses, “and not the label an employer gives it.” Just because a business asks a worker to sign a contract stating he or she is an independent contractor, and issues a Form 1099-MISC, doesn’t mean the individual isn’t an employee.
“This form simply indicates that the employer engaged the worker as an independent contractor, not that the worker is actually an independent contractor under the FLSA,” the document states.
The Administrator’s Interpretation concludes with this assertion: “In sum, most workers are employees under the FLSA’s broad definitions.” However, keep in mind that this test applies to DOL determinations and may not be relied upon by other state or federal agencies, such as the IRS. In light of the position from the WHD, if you have any doubt about whether you have classified a worker appropriately, the wise course of action would be to consult a legal professional.
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Submitted by Jim Hoeppner, Sage Senior Enterprise Managing Consultant
Many users are not aware of the variety of reports within the Sage Estimating system. In the Extended version, there are 14 estimate based reports and 21 database reports! Because Estimating Extended has more features than the Standard version, it must have more report-to-report capabilities, such as the WBS or crews report.
To see a complete list of the reports, you can go to Help>Help topics, and then on the index tab, type “reports.” It will give two report topics, “list of database” and “list of estimate reports.” Each report has an explanation to describe what is shown in the report.
All the reports have adjustments which can be made. However, the most flexible report is the Spreadsheet report. It is a custom report writer that can take a picture of whatever is on the estimate page and then duplicate that view. The settings can be saved so that that report is always available. Reports can be shared across the network.
Also, there is the option to write truly custom reports with Crystal reporting. But 99% of client are able to get by with the great range of capability built into the system.
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