Alphabetical splits in a report

I am working on a database to manage our staff seating, extensions, Office numbers, office wiring, etc. All is working well, and I want to start to combine it with some of the data tracking that they do, such as the office phone listing. In there phone listing the last names are broken into sections like so:
-----------A----------
Andreson, Alice
Anderson, John
Arkin, Lily
----------B-----------
Ballman, jim
....

So for each section I would like a header denoting the first letter of the last name section. I'm guessing I could make another field which had the first letter from each last name (query can do that easy), and group by that, but is there another way done right in the report?

Also would like to (hoping to) have it output in Column form, possibly getting 6 columns across a 11x17 page (landscape). Want to keep it as close to the current format as possible.