May 2015 Newsletter


The Good News is…a Mixed (Use) Bag

While we most likely will never see the construction boom of 2005 reoccur, U.S. construction starts are on the incline and projected to stay that way. Maybe not just in the way you thought…

What We’re Talking About in May:

  • CMD Group and Alex Carrick contribute to our newsletter!
  • Mixed-Use Development/Living
  • Euclid, OH – the birthplace for ‘single use’ zoning
  • Tips and Tricks for Sage 100 C and Sage 300 CRE

The State of the (Construction) Union

CMD, AIA, and AGC Weigh In

CMD Group, (formerly Reed Construction Data), held a webcast on April 30th, entitled “Will construction pick up the pace or the pieces?” The economy update included Alex Carrick, North American Chief Economist, CMD; Kermit Baker, Chief Economist, American Institute of Architects; and Ken Simonson, Chief Economist, AGC of America. (View the entire webcast here.)

The webcast was a plethora of information including labor/unemployment statistics, construction starts, architectural billing reports, trends, and forecasts.

As usual, we picked a few nuggets from the vault of information to share with our Sage 100 and 300 Construction and Real Estate clients and prospects. In the simplest of terms and graphics, the forecast for construction starts is good:




However, the increase in starts is NOT repeating history, literally. Multi-family residential construction has returned to balance, whereas single-family construction is nowhere near the bubble of a decade ago:



Snapshot of Multi-Family (MF) versus Single-Family (SF) spending. The slide’s title says it all:



It’s a ‘new normal’ for construction growth, apparently. Residential is making a comeback, just not in the same form (single homes). Retail shopping is evolving into an online activity, and not a destination experience. The government stimulus spending seems to have come to a crawl:

More ‘Nuggets’ from the Presentation

  • Finding laborers – 83% of construction companies surveyed reported difficulty in finding craft people (carpenters, roofers, etc.,), and 61% are having trouble filling professional positions (estimators, PMs/supervisors).
  • The Panama Canal expansion has impacted (increased) the US spend on ports, infrastructure, local ancillary businesses (storage, trucking, etc.,), as well as inland businesses (manufacturing, distribution).
  • The US has greatly reduced its dependency on foreign oil, and is rapidly approaching self sufficiency. Shaling is producing  onsite, nearby, and upstream/downstream construction demand and may negatively impact wind, solar, nuclear and coal construction industries.
  • Commercial property values fell further than house prices, but recovery has been stronger.
  • Architectural starts for 2015 were slow, but are trending up


Single-use versus Mixed-use

Mixed-use development is hardly a new idea. From the dawn of time, communities have lived, worked, and played together. Families made and sold wares/services from their homes, people walked everywhere, and neighborhoods held the diversity that was required to live life at that time or location.

A, o, way to go, Ohio?

So, how did the American dream of a life in the ‘burbs evolve? And why is it shifting back? First a little history:

Single-use zoning, also known as Euclidean zoning, is a practice of urban planning where everyday uses are separated from each other and where land uses of the same type are grouped together. Shops are concentrated in one area, housing in another area, industry in another.” Euclidean zoning is a reference to the court case that established its constitutionality, Village of Euclid, Ohio v. Ambler Realty Co. 272 U.S. 365 (1926).  Source: Wikipedia.

The evolution of separating work from residences coincided with the industrialization of America, where manufacturing and its by-products (pollution) drove workers to more rural areas.

Another contributor to single-use regulations were highly populated urban areas like New York, where sun-blocking skyscrapers caused restrictions on building height, eventually leading for the need to separate uses for zoning laws.

Eventually, private automobiles and cheap gas prices allowed a mass exodus to the suburbs, which became the status quo for the American model of living. Even into the recent recession, cheaper lots and home building lured buyers to the edges of cities. Living on the fringes requires a LOT of retail construction, school construction, infrastructure, commercial construction, etc.

The ‘Donut Hole’ Life!

CMD opened an interesting topic during their presentation, namely ‘live/work, mixed use projects.’ We asked North America Chief Economist, Alex Carrick, to expound on the concept:

Alex with jacket - FormalIn non-residential building construction, the hottest trend is mixed-use, live-work, learn-play projects. These can center on any of three primary-use project types – office buildings, residential or hotel. They can also incorporate a vast range of other kinds of activities.


In urban studies, the worry used to be about ‘the donut’ (e.g., city centers ‘hollowing out’ as everyone moved to the suburbs). Now, the opposite is occurring, with both seniors and the ‘younger set’ recognizing the multiple advantages of living downtown, or within a campus-like community.


Mixed-use projects located above or adjacent to rapid transit stations provide a virtuous circle. Local residents provide riders for the transit lines; the transit lines provide shoppers, diners, theater-goers and residents for the mixed-use projects.


Also, the promotion of rapid transit has the distinct advantage of being ‘green’ conscious.


Young adults entering the work force, and saddled with an accumulation of student debt, are looking for ways to reduce expenses. They’re renting rather than purchasing accommodation; riding bikes and favoring electronic gear over buying a car.

newdonutOlder Baby Boomer buyers are also looking for a downtown lifestyle close to restaurants, amenities, and cultural events – with no maintenance or upkeep. Boomers have done the ‘burbs, may have possibly lost their home to foreclosure or short sale, and are now looking for an alternative, easier lifestyle.

So, will mixed-use and work/play change the roadmap of construction? Stay tuned for LAI Newsletter with updates from our friends at CMD Group, JBKnowledge and Sage. 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 Company Page | LinkedIn LAI Sage 300 CRE Users Group




Upcoming LAI Online Training and Networking Events:

What Do Your Workers Cost?

Submitted by Walt Mathieson, Certified Sage 100 Consultant

Don’t Miss the Incremental Costs of Field Labor!

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.ile 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 your Sage Certified Consultant a call.


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

Sage 300 Best Practice: Create an Archive Folder

Submitted by Kyle Zeigler, Sage Senior Certified Consultant

If you still call your accounting software “Timberline” instead of “Sage 300 Construction and Real Estate,” it’s a safe bet you’ve been using the system for at least a few years.  Even if you just implemented Sage 300 CRE, eventually your reports and processes will begin to slow down in proportion to the quantity of data you have processed over time.  Before the slowing begins, it’s a good idea to consider how you’re going to routinely archive older data to store it safely, have it conveniently available for reports and inquiries, and still keep your reports, backups, and month-end processes running efficiently.

In the Tools menu of most of the Sage 300 CRE accounting modules, you will find that you have the ability to move transactions from the Current transaction file to a History transaction file.  Most of the canned (Sage-supplied) reports use the Current file by default, but allow you to also include the History file as desired when running the report.  By moving transactions from Current to History, you narrow down the quantity of data the system has to slog through to produce the report when only more recent data is needed, but you can still include older data when necessary.  Moving Current to History takes place in the active or “live” data folder, where the History files are immediately accessible.shutterstock_268233038

In cases where even the size of the History files may need to be reduced, the use of an archive folder is recommended.  Archive folders are also a best practice for moving JC jobs and associated transactions that are no longer routinely accessed in the active data folder.  Moving data from the active data folder to an archive folder doesn’t mean they are no longer available for reporting purposes, just that you will now have a new “company” folder that holds the archived information.  Kind of like moving some of your marbles from one jar to another – you don’t lose them; they’re just in a different jar.

To create an archive folder, use File > Company > New Company.  When the New Company screen appears, enter a name for your archive folder.  We recommend you start the name with an X or Z so that the archive folder appears in your Open Company selection list below your other company folder(s) (for example, “Z Archived Data”).  Once you click OK, this new “company” is available in your Open Company selection list.  It is also available as a receptacle for moving transactions (Current to Current or History to History), jobs, employees, etc.  Some reports and inquiries may need access to the master files in the original company folder, but you can “point” the archive folder to the appropriate master files using File Locations, allowing the archive folder’s reports and inquires to “look up” data in the original company folder.  On the less frequent occasions when you want to run reports on old jobs, former vendors, customers or employees, simply use File > Open Company to open the archive folder and you’re all set!

For more information about creating an archive folder or archiving data in general, search the Sage Knowledgebase using your customer login or contact your local Sage business partner.


Submitted by Bryan Eto, CPA


As businesses and individuals begin to towards paperless reporting and storage, one question always comes up…Do I have to keep this? Here are some guidelines in case the IRS ever comes calling.

IRS Audits and Amended Returns

You should generally keep records supporting items claimed on your individual tax return until the statute of limitations runs out. Typically, that is three years from the due date of the return or the date you filed, whichever is later. So this year you can generally toss out your tax records for the 2011 tax year (return filed in 2012) and most paperwork you have left from that year and earlier years.

But keep your files for the past three tax years. This is because the IRS can audit your returns for a minimum of three years after you file. You can also file an amended return on IRS Form 1040X during this time period if you missed a deduction, overlooked a credit or misreported income.

But you are not necessarily safe from an audit after three years have passed. There are a couple of key exceptions to this general rule:

1. The statute of limitations increases to six years if the IRS has reason to believe you understated your income by 25 percent or more, and

2. There is no time limit if the IRS suspects fraud or you do not file a tax return.

Various Retention Requirements

Keeping records for three years is the general rule. There are exceptions for certain records. In some cases, there is no easy answer to the question of how long you should keep specific papers. The IRS does not require you to keep records in any particular way. But here are some basic guidelines for individuals to follow. (See the right-hand box for business guidelines.)

Completed tax returns. Some tax advisers recommend that you hold onto copies of completed, filed returns for your lifetime. The reason is so that you can prove to the IRS that you actually filed if there’s ever a question about it. Even if you don’t keep the returns indefinitely, you should hang onto them for at least six years after they are due or filed, whichever is later.

Backup records. Any written evidence that supports figures on your tax return, such as receipts, expense logs, bank notices and sales records, should generally be kept for at least three years.

Exceptions. There are times when you may be entitled to more than the usual three years to file an amended return. For instance, you have up to seven years to take deductions for bad debts or worthless securities, so don’t toss out records that could result in refund claims for those items.

Real estate records. Keep real estate records for as long as you own the property, plus three years after you sell (or otherwise dispose of) it and report the transaction on your tax return. Throughout ownership of the property, keep records of the purchase, as well as receipts for home improvements, insurance claims, and documents relating to refinancing. These may help prove your adjusted basis in the home, which is needed to calculate the taxable gain at the time of sale, or to support calculations for rental property or home office deductions.

Securities. To accurately report taxable events involving stocks and bonds, you must maintain detailed records of purchases and sales. These records should include dates, quantities, prices, dividend reinvestment, and investment expenses, such as broker fees. Keep these records for as long as you own the investments, plus the statute of limitations on the relevant tax returns.

Individual Retirement Accounts (IRAs). The IRS requires you to keep copies of Forms 8606, 5498 and 1099-R until all the money is withdrawn from your IRA accounts. Now that Roth IRAs have been added into the mix for some retirement savers, it’s more important than ever to hold onto all IRA records pertaining to contributions and withdrawals in case you’re ever questioned. If an account is closed, treat IRA records with the same rules as securities. Don’t dispose of any ownership documentation until the statute of limitations expires.

Issues affecting more than one year. Records that support figures affecting multiple years, such as carryovers of charitable deductions, net operating loss carrybacks or carryforwards or casualty losses, should be saved until the deductions no longer have an effect, plus seven years, according to IRS instructions.

These general recordkeeping guidelines are for individual tax purposes. Businesses, insurance companies and creditors may have other requirements. Contact your advisers for more information.

Last word: One critical step to take when cleaning out financial documents is to shred them thoroughly before you toss them out.

Business Record Guidelines
Employee earningsMaintain for at least four years, to meet various state and federal requirements. (However, don’t throw away records that might involve unclaimed property, such as a final paycheck not claimed by a former employee.)
Employee time cardsKeep for at least three years if your business is subject to the Fair Labor Standards Act (engaged in interstate commerce). It is a best practice for all businesses to keep the files for several years in case questions arise.
Personnel recordsRetain for three years after an employee has been terminated.
Employment tax recordsKeep four years from the date the tax was due, or the date it was paid — whichever is longer.
Employee business expensesFor travel and transportation expenses supported by mileage logs and other receipts, keep supporting documents for the three-year statute of limitations.
Sales tax returnsState regulations vary. For example, New York generally requires sales tax records to be retained for three years, while California requires four years, and Arkansas, six. Check with your tax adviser.
Business propertyRecords used to substantiate the cost and deductions (such as depreciation, amortization and depletion) associated with business property must be maintained to determine the basis and gain (or loss) on the sale. Keep these for as long as you own the asset, plus seven years, according to IRS guidelines.



Beach Fleischman
2201 E. Camelback Rd.
Phoenix, AZ 85016


Help is on the Way!

Submitted by Jim Hoeppner, Certified Sage Consultant

The “Help” system is often overlooked in software in general, which is unfortunate; the Help system in Sage Estimating is very good. I remember that when I started in support at Timberline in 1998, sometimes I would race to the Help topics to better understand a problem that a client was having.

In February, I wrote about the sorting with ASCII, the very important system used in North America for Window- based computers which determines how we can find what we are looking for by priority in any list. The information listed below is well summarized and explained in this Help topic. Just go to Help Topics and look up ‘Sorting on the Index’ tab.

  • Spaces (come first at the top of any list)
  • Special characters !# etc
  • Numeric characters
  • Upper case A,B,C, etc.
  • Lower case a,b,c, etc.

Functions>Using Functions in Formulas

Aside from that, a very helpful topic is Functions-Using Functions in Formulas. It explains about IF statements and many other type of useful functions in Sage Estimating. The blue highlighting of the function name means that it is hyper linked so that you can go directly there.

The Help system also has context help, meaning that when you see a question mark in the upper right of a screen, you can drag that to the feature that you are inquiring about and click on it to get a Help note.

Aside from the main text Help, there are also short videos (Show Me Demos), under Help that might be of interest.

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