Excel file error saving to server because of .TemporaryItems folder

I am running a standalone Macintosh file server. OS v10.10.1 and Server v4.0.3. All my users are setup with local accounts.

The problem is when some users are working on an Excel or Word document and try to save they get an error message " Document saved successfully. Cannot reopen the saved document due to low memory, Please close the documents. Followed by the message " Excel could not open FileX because some content is unreadable.

After researching the problem appears to be Microsoft Office is saving the open file in a .TemporaryItems folder first, then saves the file and then deletes the temp file. This works fine on a local workstation. The problem is when there is a shared folder the local users are all trying to save to that same folder beause the local user has the same UID.

I read where creating a new .TemporaryItems folder on the server and giving all rights to it for all users fixes the problem. Well it didn't. Or I didn't set it up correctly. Does some one have an easy to follow guide on how to set this up. I have some UNIX knowledge but not a lot. Does the folder have to be created in more than one location? How do you setup the permissions?