Archive for the ‘Construction Economy’ Category
Yes, this is our last plug for the annual Technology Day event this week - April 4th, and we are very excited to see everyone! Have you registered yet? If not…
…so you can join us at the beautiful Double Tree Resort in Scottsdale Arizona. Bring your smartphone, tablets and other devices and plug-in to the future of construction technology.
Keynote speaker Joseph Granneman, CIO of Rockford Orthopedic, will kick things off with a presentation focused on information security and compliance.
Representing Sage, our co-hosts, Todd Juhnke, Regional Sales Manager-Construction and Real-Estate Division, and Diane Haines, Sr. Director, Product Management, Construction & Real Estate will be presenting the powerful cloud based construction technology solution – Sage Construction Anywhere.
There will then be afternoon sessions with multiple tracks for learning about specific topics. Head over to the registration page to learn more about all of the Tech Day Tracks.
And make sure you bring your old cell phones too! Ledgerwood Associates will be collecting them for Cell Phones For Soldiers, a non-profit dedicated to helping our troops stay in contact with their families here at home.
Don’t miss out on all of the fun and information this year. We look forward to seeing and talking to you all!
New Mexico Legislature eliminates double tax on leased equipment-—will Arizona follow?
Due to the construction downturn, many firms are leasing instead of purchasing new equipment. Here’s some BIG news from the Land of Enchantment for companies leasing equipment, passed along from CFMA member, David James CPA, CCIFP.
The New Mexico Legislature passed a provision to exempt rental/lease revenues from companies leasing construction equipment to “a person engaged in the construction business,” effective January 1st, 2013.
This legislation recognizes that states (New Mexico and Arizona most notably), which tax prime contractors on their gross receipts, are getting a double tax when contractors are charged tax on equipment rented to perform under a contract that is already taxed! It’s good for New Mexico to be progressive and eliminate this double tax …Arizona, however, still wants the revenue!
The process will require the contractor to issue a NTTC-6 form to the vendor. The vendor will then be able to exempt the rental income. This applies to direct rentals
as well as owner/operated equipment.
CFMA members in the Albuquerque chapter reported that various industry groups and CPA’s were able to meet with legislators to get this change. It may be time to explore this option in Arizona, although it was reported that New Mexico has a positive fiscal position, not necessarily enjoyed by Arizona.
If you are doing business in the “Land of Enchantment,” get out those NTTC-6 forms and save!
Here are the complete provisions of the New Mexico legislation:
**Effective January 1, 2013**
7-9-52.1. DEDUCTION–GROSS RECEIPTS TAX–LEASE OF CONSTRUCTION EQUIPMENT TO PERSONS ENGAGED IN THE CONSTRUCTION BUSINESS.–
A. Receipts from leasing construction equipment may be deducted from gross receipts if the construction equipment is leased to a person engaged in the construction business who delivers a nontaxable transaction certificate to the person leasing the construction equipment.
B. The lessee delivering the nontaxable transaction certificate shall only use the construction equipment at the construction location of:
(1) a construction project that is subject to the gross receipts tax upon its completion or upon the completion of the overall construction project of which it is a part;
(2) a construction project that is subject to the gross receipts tax upon the sale in the ordinary course of business of the real property upon which it was constructed; or
(3) a construction project that is located on the tribal territory of an Indian nation, tribe or pueblo.
C. As used in this section, “construction equipment” means equipment used on a construction project, including trash containers, portable toilets, scaffolding and temporary fencing.
(Laws 1998, Chapter 94, Section 1 – Effective January 1, 2013)
188.8.131.52 – LEASE OF CONSTRUCTION EQUIPMENT – GENERAL
A. Receipts from leasing construction equipment, with or without operators, on or after January 1, 2013, to a person engaged in the construction business may be deducted from the lessor’s gross receipts pursuant to Section 7-9-52.1 NMSA 1978.
B. Example 1: A is regularly engaged in the lease and rental of construction equipment. A enters into an agreement to lease a crane with an operator to a contractor engaged in the construction business to be used on a construction project. The contractor will direct all of the activity of the crane and operator on the construction site. A’s receipts from the lease of the crane with an operator are receipts from leasing construction equipment pursuant to Section 7-9-52.1 NMSA 1978 and are deductible.
C. Example 2: X is a heating and air conditioning subcontractor on a construction project. X owns a crane which X regularly uses to lift equipment onto the roof of buildings on which X works. X’s receipts for construction services includes payment for using the crane. X may deduct those receipts under Section 7-9-52 NMSA 1978. If, however, X agrees to lease the crane with an operator to the prime contractor for work unrelated to the subcontract, which work is performed at the direction of the prime contractor, X would not be able to deduct the receipts for the leasing of the crane under Section 7-9-52 NMSA 1978, but could deduct the receipts under Section 7-9-52.1 NMSA 1978 as receipts from the lease of construction equipment.
D. Example 3: C is engaged in the construction business. C hires S, a scaffolding rental company, to deliver scaffolding to a specific construction project, erect the scaffolding, inspect the equipment daily for continued safety compliance, disassemble the scaffolding and 3.2 NMAC transport it away from the construction site upon completion of the project. C may execute a nontaxable transaction certificate to S for the lease of the scaffolding pursuant to Section 7-9- 52.1 NMSA 1978.
E. This version of 184.108.40.206 NMAC applies to transactions occurring on or after January 1, 2013. [220.127.116.11 NMAC - N, 12/14/12]
Trust Ledgerwood Associates for construction technology consulting, products and news; Call 1-877-918-8302 today!
Amid predictions of a long-awaited housing industry recovery, NAHB launches its 2013 International Builders Show in Las Vegas later this month (January 22-24, Las Vegas, NV). Everyone associated with the homebuilding industry will be there, from suppliers of building materials, mechanical systems, fixtures and trucks, to mortgage lenders, insurance brokers and technology vendors.
If you attend the show, please stop by and say hello to Ledgerwood Associates and the Sage Construction and Real Estate team. Take a few minutes for a demo of Sage Construction Anywhere. Ed Ledgerwood will be there as part of the Sage contingent in booth C3049. As a long-time Sage Business Partner and industry expert, Ed can help you successfully navigate the construction industry technology marketplace.
This year’s show has a kind-of rising-from-the-ashes feeling to it, like the name of our fair city, Phoenix. Appropriately, Michael Eisner, past Chairman and CEO of The Walt Disney Company, is the keynote speaker. In the 80’s he revived Disney from a near coma to become an entertainment powerhouse. He hopes to inspire attendees to “Build your team, build your company and build your community”.
We all know that homebuilding today is challenging. According to the show website, “Everything has changed.” In the Day Two keynote session, a panel of rising homebuilders “will discuss how successful private builders are responding to these changes, and how they are defining new ways to operate profitably.” In our experience, change means opportunities, and we are eager to help our clients capitalize on the ones that come along.
A 90-minute preview of “disruptive technologies” by the New York Times’ tech reviewer, David Pogue, promises to be one of the more entertaining sessions. Attendees will “see samples and demonstrations of the newest gadgets and platforms in the tech world that can help your business grow.” Helping customers sort through the technology hype is a big part of what we do at Ledgerwood Associates.
Educational opportunities are varied. Attendees can choose from all-day “Master” sessions – basic topics or advanced, and “speed learning” classes, presumably for builders to fast track through many sessions.
At $450 for NAHB members, registration fees are moderate. And, there is one terrific bargain that you shouldn’t pass up – the $20 Spouse Registration. That’s right, for $20 your spouse can get $50,000 worth of remodeling ideas. Even if you’re already well settled in your homestead, it’s still inexpensive entertainment.
How to wrap up such an event? NAHB supporters will be treated to a concert from the power-pop rock band, Cheap Trick. And that just about sums up what the housing industry economy may have felt like for years.
At least this year there’s hope!
Here’s a great article from Sage CRE on building customer loyalty:
Building Customer Loyalty in Construction: Part 1 – Think Differently
11/14/2012 at 11:18 am by Dennis E Feldner,
Most construction contractors believe that having a core group of loyal customers who provide repeat business isn’t possible. There’s a strong feeling among contractors that customers lean one way: the contractor with the lowest bid gets the job. However, this isn’t necessarily true and can be overcome by consistently implementing a plan addressing sound customer service principles. Read full post>>
When R&J Construction was looking for a way to reduce labor costs they became early adopters of an emerging, cost saving technology that would soon be requested by their peer organizations nationwide - “mobile data collection”.
Employees of R&J Construction recorded their time on paper timesheets that were unverifiable and required manual data entry into back office time/labor, payroll and accounting packages. Controller Paula Wiens decided to “tighten the ship” by eliminating the costly paper processes. She implemented a solution that allows employees to clock in and out of job sites using their mobile phones.
With the new mobile “apps”, R&J gained better insight into billable versus non-billable time and improved their management of mobile workers with real time GPS, time and job tracking. The solution allowed R&J to process payroll and bill clients more quickly and more accurately. It also turned the gathering of critical data for time and billing into a “paperless” process, reducing errors and saving time.
After a few weeks, Wiens began using the application’s reporting features to look for trends and to identify ways to manage job costs. If an employee took six hours to complete a job which should normally take three hours, Wiens checked in with the project superintendent to find out what happened to increase the labor hours.
An area where R&J saw immediate savings was in fuel costs. The mobile data collection application automatically captures GPS data and calculates miles driven. A mileage report allows Weins to audit and compare the employees’ fuel expenses with actual use to uncover any abuse or mistakes. R&J saved $6,000 the first month, when employees were notified that the GPS system was in place, and about $10,000 a month since.
Adding up the savings from paperless time reporting, jobs trends analysis and automatic mileage reporting, mobile data collection helps R&J save about $200,000 per year! The company also does more accurate job costing for clients. In addition, the data collected on mobile apps is seamlessly integrated into R&J’s Sage accounting application and their ADP payroll solution.
R&J Construction understands the power of mobile data collection to save time and money. It is. It does. It saves.
Contact us to see how you can integrate mobile technologies with your existing Sage Timberline applications.
The boss is glaring at you, the controller, and says, “Cut the IT budget for next year or we’re out of business!” “How in the world am I going to cut IT costs and worse, tell the boss he needs new servers?” you say under your breath.
Don’t despair. There IS a way to reduce your IT budget AND avoid the costly server upgrade. It’s called “Hosting”, a variation of Cloud computing. Hosting is where you put your construction software and data offsite on another company’s servers and access it from anywhere you have an internet connection. Moving your software and data to the Cloud by hosting is like using other people’s money, only it’s other people’s servers.
With hosting, you get the benefits of new servers without the big investment and ongoing costs of server maintenance. You don’t change software. There is no costly conversion. There is nothing new to learn.
- Reduced investment – Someone else buys the servers
- Reduced IT costs – All you pay is a low monthly fee
- Reduced Headaches – Someone else does the backups and fixes problems
“Putting our Timberline applications on the cloud saves us money and eliminates all of the usual IT problems… [and] the data security of the cloud means I can sleep at night.”
The construction company owner above once ran into a burning building to rescue his server. Now his software and data are housed in a secure data center.
Moving your applications and data to the Cloud with hosting can be done at any time. Just make sure it gets into the budget for next year. The benefits, lower IT costs and fewer headaches, make it a no-brainer. And, you can be a hero:
Budgeting Hero Checklist
- Do I need to upgrade my servers next year?
- Do I want to reduce my total IT costs?
- Do I want fewer IT headaches so I can focus more on what I do best?
If you answered yes to any of these questions, hosting can solve the boss’s budget crisis and make you a budgeting hero.
Click here for more information about Timberline Hosting, or call Ledgerwood Associates, at 480-423-8300.
I want to know what you think. What are some of your concerns about hosting?
The construction industry continues to hold the unhappy distinction of having THE highest unemployment rate. Last month that rate rose even higher to 18.2%, for the month of July that’s decidedly up from 17.4% in June.
According to the latest release from the Bureau of Labor Statistics the construction industry lost another 76,000 jobs in July compared to an average of 73,000 over the previous three months. So far 1.3 million construction jobs have been lost since the recession began.
The current construction unemployment rate is now double that of the country’s overall unemployment rate which stands at 9.4%.
To review all of the BLS statistic, go here.
It’s being called the longest recession since the Great Depression. It looks as though economists all concur – we’re coming out of the recession What is not so sure is just how long before we slip BACK into one!
One J.P. Morgan economist predicts “growth wouldn’t be robust enough to halt the rising unemployment rate, which he projects could go up from its June rate of 9.5 percent to around 10 percent. The jobless rate might begin to fall by next spring or early next summer. That means that the next year is unlikely to feel much like a recovery, and it’ll be about 12 more months before Americans begin to feel secure about their jobs.”
Another economist says “There won’t be enough job growth until 2011 to meaningfully reduce unemployment. It will be a slog.”
Yet another claims, “By next year, the Obama administration and the Fed may have to choose between higher inflation and fewer jobs.”
While this news is less than heart-warming, it is nice to know that at least for now, things are looking up which will make facing future downturns a little easier to stomach. It won’t be one long continuous financial death march for those of us struggling to get through.
To read the Tools of the Trade Online I heavily quoted from please click here.
Industry experts were quick on the draw after the Associated Press released its assessment of the more than 5,500 stimulus transportation projects being planned throughout the country. It looked at how states planned to spend the first installment of highway money granted by the stimulus. The AP followed the money trail and reported some eyebrow-raising findings. The AP reports states are planning to spend 50 percent more per person in areas with the lowest unemployment rather than in those that have the highest.
BUT Ken Simonson, Chief Economist for the Associated General Contractors of America, had plenty to say about the AP’s findings. FIRST of all, he pointed out, “The intent of the infrastructure portion of the stimulus was clear; put construction workers back on the job. So far as early reports from our members make clear, the stimulus’ transportation investments are doing just that.” Simonson went on to say that construction workers are nomadic. They go where the work is and so it is highly likely that those from places where unemployment is highest might be the ones actually working in the lower unemployment areas. They will then take their wages back home and inject it into their local economy.
Another consideration, materials like concrete and steel are made somewhere else so even though the jobs may not be in the high unemployment areas the materials needed to build the projects may be coming from highly-impacted areas. That would put money in the pockets of those who make the materials as well as those who ship them.
Simonson also pointed out “the Associated Press analysis fails to take into account the significantly higher unemployment levels within the construction sector than the rest of the economy. Construction unemployment is now nearing 19 percent, while the overall U.S. unemployment rate remains below 9 percent. As a result, even in counties where overall unemployment may be low, construction unemployment may be significantly, and surprisingly, higher.”
The Transportation Department responded by saying it will review the AP’s findings and see if they can duplicate them. It will also continue to pressure states to give the money to those most in need.
For a list of construction companies already benefitting from stimulus funding click here.
Conventioneers heard some pretty optimistic news about the nature of the construction economy. Those who recently attended the Institute for Scrap Recycling Industries (ISRI) 2009 convention in Las Vegas heard from top economists. Ken Simonson. Bill O’Neill. Brian Westbury. If you don’t their names it’s okay. What you really need to know is what they had to say.
Ken Simonson, Associated General Contractors of America’s Chief Economist, said he expects to see second quarter U.S. growth, and described the recession as a checkmark with the worst behind us. That aligns itself to what others across the country are saying. The economy is bottoming out, on that most agree. What they don’t agree on his how long it’s going to take to surge ahead. Many believe it will be a painfully slow but steady return.
Long-time commodities economist, Bill O’Neill of LOGIC Advisors, told the convention-goers, “We are in a bottoming process, but I think it is a swimming pool bottom that comes down sharply, extends along the bottom and then we’ll have a surge.”
O’Neill goes on to say there is a lot of psychology in what is happening now. People are afraid to spend. Fear has crippled many of them and adds that the current 5 percent personal spending rate is “a fear-based rate”. He also predicts the U.S. housing market will recover before the second quarter of 2010.
Chief economist at First Trust Advisors, Brian Westbury, told the crowd he has a very optimistic view of the economy. “The economy is turning the corner very quickly and we’re going to be shocked at how rapidly things pick up from here. I think in the second half we’re going to see the U.S. GDP up at a 3.5 percent annual rate.”
To read more of what the three economists had to say click here.