Year-End Capital Investment Planning

In SPS Commerce, Year End by Kevin Stroud

Year-End Capital Investment Planning

Dear AccountMate Clients,

It’s that time of year everyone starts glancing ahead at the bottom line – and the tax implications thereof.

While we’re holding our breath to see what changes may be made, it’s certainly not looking like any tax law changes will be back-dated to the beginning of 2017 as was earlier hinted – so we’ll have to work with what we’ve got for at least this year…

One of the most pro-business aspects of the current tax laws is the “Section 179 Deduction” which allows the immediate expensing of capital investment, amortizing the depreciation over several years.

Please consult your CPA or business tax advisor for details specific to your business, but the overview is:

  • The 2017 Deduction Limit is $500,000 and this deduction is good on new and used equipment, as well as software purchases.
  • The 2017 Spending Cap on equipment purchases is $2,000,000 – so that’s the maximum amount that can be spent on equipment before the Section 179 Deduction begins to be reduced on a dollar for dollar basis.
  • The Bonus Depreciation is still 50% for 2017 – then is scheduled to reduce to 40% for 2018, 30% in 2019, and phase out completely for 2020 and beyond.

In the simplest example, at a 39.6% corporate tax rate a $100,000 in capital investment (equipment, vehicles, computers and software) would reduce your tax bill by almost 40% – so your cost after tax consideration would be only $60,400.  This is true up to a total investment of $1.26M to generate the full $500,000 immediate deduction – and that’s before taking into consideration the regular and bonus depreciation which then would come to bear.

While a 40% discount sounds pretty good, when Section 179 is coupled with an Equipment Lease you can take full advantage of the tax savings yet have out-of-pocket payments often less than that savings.  Yes, you are reading that correctly, in many cases the deduction will actually be a profit in this year!

And if there’s EVER a year to minimize taxes with the expectation that next year’s tax laws will be more favorable, then 2017 is that year – and we just happen to have equipment leasing options available which can even include “no payments until 2018.”

So if you’re even remotely considering upgrading your AccountMate system, or investing in other equipment and would like to finance it, then we should definitely chat.  Your tax bill will thank you…

Regards,

Kevin E. Stroud
NexLAN, LLC
https://nexlan.com


Upcoming EDI Webinar: SPS Commerce

 

Coming up in the middle of the month is a webinar on SPS Commerce Cloud EDI for AccountMate, which integrates with the industry’s largest network of retailers, manufacturers, distributors, third party warehouses and more.  A subscription-based service, costs are low while avoiding the complexity of doing EDI in-house, and you even have the option of integrating your highest volume customers with AccountMate and managing lower volume customers on our web-based solution.

So if you’re interested in the automatic import of incoming sales orders with acknowledgment, advance shipment notification, and customer invoicing then don’t miss the presentation by SPS Commerce this Friday, November 17th at noon CDT – register here.


Tech Note: Understanding the Recalculate Inventory Data Feature

The Recalculate Inventory Data feature resolves inventory data inconsistencies, so it’s important to understand when to use the feature, what kind of inventory data inconsistencies it can resolve, and the proper procedure to follow.  Thus, we present Article #1287: Understanding the Recalculate Inventory Data Feature. This Technical Note enumerates the conditions that require inventory data recalculation and lists the tables affected and validated during recalculation. This document also discusses the prerequisites before you perform inventory data recalculation, the procedures to use, and possible issues that will cause the recalculation to fail.


Tech Note: How to Activate and Set Up Bank Reconciliation

If you’re not currently using the Bank Reconciliation (BR) module, then you’re missing out on the ability to see your current cash position at your fingertips and the ability to validate your Balance Sheet.  It’s simple and easy to add – and even includes the ability to import your bank statement and automatically clear transactions.

There are some “tricks” to adding the BR module to an existing AccountMate installation, which are detailed in Article #1183: How to Activate and Setup the Bank Reconciliation Module in an Existing AccountMate Installation.


Tech Note: Understanding the Quantity Calculation Methods When Creating POs by Reorder Quantity

Users can specify the reorder point and reorder quantity for each inventory item, which AccountMate then uses to recommend order quantities in the Create Purchase Order by Reorder Quantity function.  The methods to calculate suggested reorder quantity are detailed in Article #1233: Understanding the Quantity Calculation Methods Used When Creating Purchase Orders by Reorder Quantity.


Technical Tips

Versions: AM10 for SQL and Express
AM9 for SQL and Express

Module: IC

Q: The Standard Cost field in the Inventory Maintenance > Settings (1) tab is disabled. Why and how can I change the standard cost? 

A: The Standard Cost field will be disabled if the cost method assigned to the inventory item is Standard, Standard with Spec ID, or Standard with SN. You can change the standard cost of an item by posting a cost adjustment using the Inventory Adjustment function.

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Version: AM10 for SQL and Express (MS1002 and higher)

Module: PR

TIP: Starting in AccountMate 10.2 for SQL and Express, you have the option to accrue leave hours for holiday and used leave hours during Apply Payroll/Payment. This feature only applies to paid leave codes with Per Hour Work accrual method. 

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Versions: AM10 for SQL and Express
AM9 for SQL, Express, and LAN
AM8 for SQL, Express, and LAN
AM7 for LAN

Modules: AR, SO

Q: I want to stop users from creating new sales transactions (e.g., Create Sales Order, Ship Sales Order, Create Invoice, etc.) for a customer but allow them to record payments received from the customer. How can I do this? 

A: Set the customer status to Inactive. Sales transactions cannot be created for inactive customers; however, payments can be recorded. To set customer status to inactive, access the Customer Maintenance > Settings tab and select the Inactive option in the Status field; then, click Update to save the new setting.

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Version: AM10 for SQL and Express (MS1002 and higher)

Modules: AR, SO

TIP: Starting in AccountMate 10.2 for SQL and Express, you have the option to show the inventory item’s back order amount in the SO and AR Packing Slip and AR Invoice. In lower AccountMate versions, only the back order quantity is displayed in these reports.

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Versions: AM10 for SQL and Express
AM9 for SQL, Express, and LAN
AM8 for SQL, Express, or LAN
AM7 for LAN

Module: AP

Q: There are invoices in the Check Register Report that shows ………. in the Invoice # column. Why is this so? 

A: The Invoice # column will show ………. if several invoices were paid by the check. If you want to view the invoice numbers, then mark the Show Check Detail (Include Check Detail in AccountMate 7 for LAN) checkbox in the Check Register Report interface.

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Versions: AM10 for SQL and Express
AM9 for SQL and Express (MS904 and higher)

Module: AP

Q: We have more than one disbursing bank account. How can I configure AccountMate to allow authorized users to select the disbursing bank account from which the check payment for AP invoices will be drawn from during printing of checks? 

A: To do this, perform the following:

  1. Do not assign a bank to the AP invoice by leaving the AP Invoice Transactions > Information > Bank # field blank.

Note: If you want the Bank # field to be blank each time an AP invoice is posted, then do not assign a default bank for vendors in Vendor Maintenance > Settings > Bank # field for existing vendors and AP Module Setup > General (2) > Default for New Vendor > Bank # field for new vendors. 

  1. Do not assign a Bank # to AP invoices when authorizing payments using either the Manual Apply Payment or Automatic Apply Payment function.

AP invoices with no Bank # assigned to them will be available for selection regardless of the  Bank # you enter in the Print Computer Check or Post Handwritten Check function; thus, giving authorized uses the flexibility to choose which bank the payment will be drawn from.


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