November 2015 Newsletter
“Domo arigato, Mr. Roboto”- Styx
What we’re talking about in November:
- What do robots, breathable ‘skins,’ algae, and termites have in common? Future tech for construction!
- CMD Group report – September starts: a slide or a slump?
- TimberScan FREE Lunch & Learn on November 10th
- Tips and Tricks for Sage 100 CON, Sage 300 CRE, Construction Accounting, and Sage Estimating
Construction Technology Future
If you’re an old Styx fan like me, the campy rock song “Domo arigato, Mr. Roboto” may get stuck in your head all day! Perhaps an example of life imitating art, Mr. Roboto is thanked for “doing the jobs nobody wants to” – which could describe the state of construction labor now and most likely in the future. The silver lining behind the labor shortage could be the rise of construction automation and alternative technologies.
So far, the emerging technologies and robotics I’ve discovered are fantastic!
Ironically, the construction industry, which is notorious for being a laggard in software adoption, is now introducing buildings with facades with “breathable skin” and solar collection, panels with micro-algae that produce a heat source (which we covered in the July Newsletter), survey/scanning drones, masonry robots, and massive scale 3D printing!
To Infinity, and Beyond!
The AEC industry is embracing these technologies with ground-breaking prototypes, experimental buildings, and even a Harvard research group is jumping on board!
One of the most successful areas for applying automation and robotics has been at the building envelope. Some forward-thinking building enclosure designs practically work like animal skin, adjusting their shading and vents to changes in ambient humidity, temperature, and light. Biomimicry is a common influence on these active or dynamic façades, which incorporate moving parts, sensors, and actuators, often tied to the central building automation system.
Ter-mighty! Self-Organizing Robotics
Harvard’s Self-Organizing Systems Research Group, inspired by termites’ behavior, created the “Termes Project” – where autonomous robots were instructed to create large-scale structures. They were given a high-level set of “traffic” rules, which based their behavior on other robots movements, and the actual structure itself. There is no supervisor, no actual blueprint, no communication – just a genius algorithm which allows the robots to act independently AND collectively. Check out this fascinating video.
Masonry robots are already in use. SAM – the Semi-Automated Masonry system is a propane-powered bricklaying robot, who can stabilize and adjust itself on scaffolding! SAM is the brainchild of Construction Robotics, and you can watch him work on building a new high school in Laramie, WY here.
Was Here IS Coming!
In a twist at the end of the epic Styx song – the hero, the escapee from prison, Mr. Roboto disguised as a robot – exposes his identity as Kilroy (a graffiti slogan from WWII).
But what if Kilroy was your new superintendent?
Imagine a construction site where workers were not affected by climate, sunlight, or fatigue! Where risk, liability, and maintenance were predictable and standardized. A world where drones surveyed sites, measured and relayed data for Data Driven Design? And buildings could regulate heat, energy, and possibly produce food?
Would jobs be won based on a new value proposition? The quickest build-to-occupancy? Or maybe a new AEC standard like LEED, only more progressive? Robotics and technology would certainly be an intregal part of lean construction management, and could possibly be programming human behavior!
Domo arigato, indeed!
(Excerpts and images re-printed with permission from Construction Market Data Group.)
With a dip of 18% percent in non-residential construction starts (versus August of this year), September was tough for non-residential starts. Is this an indicator of the bigger picture?
Our friend Alex Carrick, Chief Economist at CMD Group, reported the September starts decline from August starts, illustrated below in the dark blue, top row. Private office and hotel/motel took huge dips from the previous month of August; however, a 70% jump in retail starts is encouraging. Industrial starts took a nice upswing as well in one month.
The better news is in the lower green row, which shows five upticks YOY from 2014, with only two of the four downturns (in Private Office and Hospital/Clinics starts) indicating significant numbers. You could say that the Commercial and Institutional segments are holding their own against the first three quarters of 2014 and Industrial starts have made strong headway all year.
2015-2014 versus 2014-2013
We have been watching construction starts all year long, to see if the recovery is more than wishful thinking. After seeing how September v. August performed, I wondered how the individual sectors performed year-over-year from 2014. Mr. Carrick and CMD Group were kind enough to provide the data points and update the graph, below.
Private office starts have suffered the biggest dip, with hospitals and clinics a close second for 2015. Industrial/manufacturing is clearly the winner in starts, with heavy engineering getting a lift, and retail construction, a nod.
So, was September just a bad month, or an indicator? Mr. Carrick reports it’s not a dramatic set back, apparently:
September of this year compared with the same ninth month of last year was -2.5%.
Year-to-date starts in 2015, though, are holding up fairly well. When compared with the same January-to-September period of 2014, they are ahead by 5.6%.
Comparing the individual month of September this year with the same month of last year, engineering starts (+19.4%) performed best. Both commercial (-24.5%) and institutional (-12.3%) declined. The smaller-volume category of industrial was way ahead, +410.0%.
Want to learn what three top Construction Economist believe lies ahead for next year?
Sign up for the Economic Outlook Webcast, below.
CMD Group’s Free Economic Outlook Webcast
November 19, 2015 – 9 am – 10:30 MST
The construction economy in the U.S. seems to be on solid ground, with the major building categories seeing steady volume increases and all forward-looking indicators appearing positive. Should smart construction professionals concentrate on growth in 2016 – or is there reason to remain cautious? With an election on the horizon and fluctuating stock markets, which markets will fare best? How will lower oil and natural gas prices affect materials costs? Where are the biggest opportunities and what are the biggest risks?
Discover the answers when chief economists from the AIA, the AGC and CMD come together for this year’s fall webcast. The three economists will take questions from the audience in the last half hour, and AIA members can receive 1.5 learning units for attending the live broadcast. See what’s ahead for 2016.
Free Lunch & Learn November 10, 2015 – 11:30 am – 4:00 pm MST
Sign up here.
One of Sage 300 CRE’s best-selling third-party partners, TimberScan from Core Associates, will be at our LAI Headquarters for a special, live event! Don’t miss this opportunity to kick the tires with LAI consultants and TimberScan experts! Ten more spaces available.
What You Will Learn:
TimberScan dramatically improves the A/P process & management of documents from all departments:
- Centralizes, stores and indexes all documents from all departments for easy search and retrieval
- OCR Capability automatically prefills text in data entry screen, reducing data entry by 80%
- Provides full visibility of documents in TimberScan and in Timberline
- Automatically routes invoices to approvers making the approval process 50% faster
- Provides invoice status and dollar value of invoices in approval process
- Flexible reporting and customizable dashboard
Year End Resources and Classes
Tax Changes for 2015-16
As always, LAI will bring you info as we get it, share Sage’s links to helpful YE closing tips, and offer two types of training venues.
Online or Onsite – Get YE Help Your Way!
Currently, there are two ONLINE classes scheduled. More times/dates can be added at YOUR request (so don’t be shy if your company needs help).
New this year, we’ve invited Morrison, Clark & Conover – the construction CPA firm – to present LIVE at our onsite classes. We’ve booked two EVENTS – one early breakfast session, and one lunch afternoon session.
CLICK THIS LINK TO VIEW AND REGISTER FOR YE TRAINING
Don’t forget to forward your newsletter to a friend, and follow LAI 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:
1099 Preparation for Year End
Join an LAI consultant for a live, online FREE session.
Employee W-2 Preparation and Audit
Join an LAI consultant for a live, online FREE session.
GL vs. Job Costs Reconciliation
Join an LAI consultant for a live, online FREE session.
Submitted by Walt Mathieson, Certified Sage 100 Consultant
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 electronically submit 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. Use the code to the right for a discount!
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.
Current Version Information
The latest version of Sage 100 Contractor is version 19.6.54, the release of which was announced on October 1, 2015. In addition to getting the most up to date tax tables, there are changes to the program to accommodate compliance with the Affordable Care Act.
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.
Hot Off the Press – Sage 300 CRE Version 15.1!
Submitted by Kyle Zeigler, Sage Senior Certified Consultant
Sage just announced the release of Sage 300 Construction and Real Estate version 15.1. This new version contains only a few new changes not found in version 14.1, but Sage sure packed a lot of punch in these enhancements!
Job Cost and Project Management
You now have the ability to create a document that automatically contains field information about a specific commitment. You can use the Document Designer to create templates with commitment fields and fields from other related database tables. You can also add text and images to the template, as well as format the text and fields in Word (requires Microsoft® Word 2010 or later). Version 15.1 also provides some standard templates, including a letter of intent, notice to proceed, and subcontractor agreement checklist.
If an employee will only access his or her W-2 form electronically, you can now select the Electronic W-2 only check box on the General tab of the Employee Setup window. You must specify the email address of the employee. When the W-2 form is available, an email message will be sent to the employee with the link to his or her electronic W-2 form. The W-2 form for the employee will not be printed and mailed.
And if you haven’t yet upgraded to version 14.1, you may be missing out on these past enhancements:
- SQL Gateway: A download available from Sage that lets you replicate your Sage 300 CRE data and consolidate multiple data folders into a single Microsoft SQL database. Modified Sage 300 CRE Crystal reports can be run on consolidated data, often with improved speed, and standard SQL reporting tools can be used by your internal experts.
- Executive Dashboard: Not to be confused with the Desktop Homepage dashboards, this easy-to-use graphical dashboard can be made available to users with no Sage 300 CRE access and personalized by the user. It’s browser-based, so real-time key business performance information is available anytime and anywhere.
- My Communicator for Outlook: Even users with no Sage 300 CRE access can combine the power of My Assistant and Microsoft Outlook to assign and track tasks and update Sage 300 CRE fields right from your email.
- Sage Payment Solutions: Process check and credit card payments easily and securely, and create automatic entries to your Sage 300 CRE software at the same time!
- Enhanced certified reporting: Now generate, print, or e-file weekly certified reports that comply with the Davis-Bacon Act for most states that does not accept the Department of Labor WH-347 federal certified report.
- Microsoft Windows 8.1 compatible.
For more information on other changes and fixes in versions 13.1, 14.1 or 15.1, or for assistance upgrading to a newer version, contact us at 480-423-8300.
Also, be sure to check our Upcoming Events Calendar for online Year-End preparation classes coming soon!
2015 Year End Small Business Planning
Submitted by Bryan Eto, CPA
2015 Year-End Small Business Planning
Most everyone is frustrated with our current tax system. In fact, five out of today’s Top 10 small business concerns relate to state and federal tax issues, according to the Small Business Problems and Priorities survey released by the National Federation of Independent Business (NFIB), a small business advocacy group. Tax reform will undoubtedly be a hot button during the 2016 presidential race.
Meanwhile, business owners who engage in proactive planning can take some of the “bite” out of their taxes. Here are some simple strategies for you to consider during the last part of 2015. These maneuvers require action before year end, so don’t delay.
Defer Income and Accelerate Deductible Expenses (or Vice Versa)
The majority of small businesses are organized as “pass-through entities” that don’t pay corporate-level income tax. If your business is a sole proprietorship, partnership, limited liability company or S corporation, your share of the business’s income is reported on your Form 1040 and taxed at your personal rate.
The individual federal income tax rates are scheduled to be the same for 2016 as they are for 2015. Therefore, deferring revenue into 2016 while accelerating deductible expenses into 2015 makes sense if you expect to be in the same or a lower tax bracket next year. In that case, this strategy will, at a minimum, postpone part of your tax bill from 2015 until 2016.
On the other hand, if your pass-through business is thriving, and you expect to be in a higher tax bracket in 2016 (say, 35% vs. 28%), take the opposite approach. If possible, accelerate revenue into 2015 and postpone deductible expenses until 2016. That way, more income will be taxed at this year’s lower effective marginal tax rate instead of next year’s higher rate.
If your business is a C corporation, you need to consider the 2016 corporate income tax rates. They are also scheduled to be the same as in 2015. So if you expect your corporation to be in the same or a lower bracket in 2016, postpone revenue into next year while accelerating deductible expenses into this year. If you expect to be in a higher tax bracket in 2016, try the opposite approach by accelerating taxable income into 2015 and deferring deductible expenses to 2016.
Juggling year-end revenue and expenses is fairly simple if your small business uses the cash method of accounting for tax purposes. The cash method gives you flexibility to manage your 2015 and 2016 taxable income to minimize taxes over a two-year period. Let’s look at some specific cash method strategies to consider if you expect business income to be taxed at the same or lower rate next year.
First, before year end, use credit cards to pay recurring expenses that you would otherwise pay early next year. You can deduct the charges in 2015 even though the credit card bills won’t be paid until next year. This favorable treatment doesn’t apply to revolving charge accounts issued by retailers, however: You can’t generally deduct business expenses charged to your retail store account until you pay the bill.
Another trick is to pay expenses with checks and mail them a few days before year end. The tax rules say cash-basis entities can deduct the expenses in the year checks are mailed, even though they won’t be cashed or deposited until early next year. For big-ticket expenses, send checks via registered or certified mail to prove they were mailed in 2015.
The tax code also allows you to prepay some expenses for next year, as long as the economic benefit from the prepayment doesn’t extend beyond the earlier of:
- 12 months after the first date on which your business realizes the benefit, or
- The end of 2016 (the tax year following the year in which the payment is made).
For example, you can claim 2015 deductions for prepaying the first three months of next year’s office rent or prepaying the premium for property insurance coverage for the first half of next year.
On the revenue side, the general rule is that cash-basis taxpayers don’t have to report revenue until the year they receive cash or checks in hand or through the mail. To take advantage of this rule, put off sending out some invoices for work completed in late December so that you won’t get paid until early next year. (Of course, you should never do this if it increases the risk of not collecting the money.)
If you expect to pay a significantly higher tax rate on next year’s business income, try the reverse of these strategies to raise this year’s taxable income and lower next year’s. For example, a cash-basis taxpayer who expects to be in a higher tax bracket in 2016 might ship before year end (and invoice) products scheduled for delivery in early January in the hope that customers will pay by December 31 and hold off on sending checks to vendors until after January 1.
Take Advantage of NOLs
These business tax planning strategies also can be used to create (or increase) a 2015 net operating loss (NOL). This occurs when a business’s expenses exceed its income. You can then choose to carry a 2015 NOL back for up to two years in order to recover taxes paid in earlier years, which may be a welcome boost to your cash flow. Or you can choose to carry the NOL forward for up to 20 years, if you think your business tax rates will go up and the NOL deduction could save you more taxes in the future.
Meet with Your Tax Adviser
These strategies only scratch the surface of proactive tax planning moves. Business owners who assess matters before year end have many more tax-planning strategies at their disposal than those who wait until after the start of the tax filing season.
Transitioning to MS SQL Sage Estimating
Submitted by Jim Hoeppner, Sage Senior Enterprise Managing Consultant
Sage Estimating is available in Pervasive SQL and has been available in a Microsoft(MS) SQL version for the last couple of years. Sage is working at bringing the MS SQL version to parity with the feature-rich Pervasive SQL version. Hopefully, they will bring in all the features from the Pervasive SQL version, but currently they are considering not including the multiple labor and multiple price capability which is used mostly by electrical and mechanical subcontractors.
The newer MS SQL version has a ribbon look like MS Office Excel 2010 in comparison to the MS Excel 2003 classic look. However, you can change that if you go to File—Options and select the Use Classic menu bar. Regarding that, the Options has been removed from the Edit-Options area in the Pervasive SQL version.
Also, some people may have trouble finding the Totals window in this newer MS SQL version. If you go to the View menu, then you will see on the left hand side that you can turn on the Totals window, Detail window, etc. Those then appear in the lower left of your screen and can be docked as per your wish with a right click.
The file structure in the MS SQL version is quite different. You will not be able to see the individual estimates as you did previously in Windows Explorer. The estimates are now housed inside the SQL database. They are viewable in a tree format. In order to bring your estimates from Pervasive SQL into MS SQL Estimating you will need to migrate your estimates and database. That is done with the migration tool that is within a new application, the Estimating Management Console.
The 15.12 version of MS SQL is scheduled for later November/early December. It will include the Modeling capability of the Pervasive SQL plus some minor fixes.
Would you like a copy of our newsletter in PDF format? Email Joanie@ledgerwoodassociatesusa.com and we will email it to you!