From the Dec. 2009 Issue
Professionals who manage corporate accounting and tax compliance know the intricacies of depreciation. And while individual filers may have need for asset depreciation and business expense calculations for their Schedule C businesses, their asset bases are generally very small and change infrequently, making easy work of managing them. But more formal businesses, especially as they grow, increasingly find themselves in more difficult territory as they acquire more business assets and encounter different disposal needs multiple times throughout the year.
While there are, no doubt, many professionals out there who have become experts at managing asset depreciation using Excel spreadsheets, you may want to ask yourself, “Is this really what you got into the profession to do?” Once upon a time, asset management wasn’t very complex: Simple straight-line depreciation was easy to handle. But over the past 20 or so years, depreciation methods have grown increasingly challenging, with the need to maintain multiple books per asset, sometimes as many as six or more, when you consider available methods for federal tax, GAAP, AMT, ACE, E&P and individual states.
While these additional methods can prove beneficial to companies, for spreadsheet users, they result in increasingly complex spreadsheets that require more and more time. Combined with ever-changing laws and annual changes to bonus depreciation and Sec. 179 rules, trying to use Excel to manage client assets can snowball into hours spent tweaking calculations and macros; time that probably won’t be billed at full value or, at the least, could be better spent on the golf course.
Fixed assets are often the most substantial investments that businesses make, and their valuation and the tax benefits that come with prudent depreciation strategies is critical to developing sound financials, business planning, income taxation, and state and local property taxes. This is why effective asset management for companies with more than even 20 to 30 assets requires a system that includes all of the most recent legal changes, and that automatically makes computations as different treatments are applied. This enables users to quickly see which available methods are the most beneficial to the business in the short and long term, with the ability to see the effects of those elections and make projections over multiple years. The asset management programs in this review all offer variations on these features, with some essentially working as extensions of spreadsheet systems, while others offer much more powerful database structures.
But in addition to easing the processes of depreciation calculations, many of today’s asset management systems also offer a wide range of other tools that can be valuable to either a public accountant offering services to multiple clients or to businesses that manage their asset accounting in-house. While most people may instinctively think of financials and taxes when they think of the word accounting, the heart of the word also encompasses the important concept of accountability. This means not just determining what an asset’s book value is, but also having answers to the following questions: Where is it? What shape is it in? And who has it?
For companies with growing asset bases, especially across multiple departments or geographical locations, these questions can be nearly impossible for an internal bookkeeper or staff accountant to answer. Fortunately, many asset management programs now extend their capabilities to the related tasks of tracking assets, including some that offer barcode scanning or RFID functions that greatly speed asset inventories. These tools can also help unify often differing asset knowledge from across an organization, bringing together all factors that can affect the utility of an asset, from maintenance and lifespan, to removing the property tax liabilities of ghost assets.
While asset valuation and depreciation strategies are significant factors when it comes to taxation and company financials, the more knowledge management has about all aspects of their assets, especially business-critical infrastructure, the better they can utilize those assets for production. Likewise, business leaders can more effectively perform their budgetary and capital management functions.
The systems in this review vary greatly, and one system certainly does not
fit all. However, even small businesses and accounting firms who represent them
can find benefit from an asset management system through saved time, improved
accuracy, realized tax benefits and greater accountability
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- AccountantsWorld - Fixed Assets Relief
- Designed for practitioners managing the assets of multiple clients, Fixed Assets Relief is an affordable depreciation solution that offers support for all standard and historical depreciation methods, conventions and asset classes, with the ability to perform depreciation forecasting.
- BNA Software - BNA Fixed Assets DesktopPro
- BNA Software offers a family of software geared toward individual and corporate income tax planning, estate planning, sales and use tax compliance, and several fixed asset management programs and utilities, including options for professional accounting practices, small and large businesses, and an asset inventory system designed for tracking mobile assets.
- CCH Small Firm Services - Fixed Asset Manager
- CCH Small Firm Services has been expanding the ATX and TaxWise product lines over the past few years, extending the once tax-focused brands into fuller accounting and practice management suites for small firms. In addition to income tax compliance for all entities, users of ATX and TaxWise now also have options for trial balance, payroll, write-up, W-2/1099, document management, research and website building tools.
- CCH, a Wolters Kluwer business - ProSystem fx Fixed Assets
- CCH’s ProSystem fx Fixed Assets is a part of the vendor’s comprehensive professional suite of accounting client service and management programs, providing full asset tracking, depreciation and reporting for all types of assets and built-in calculations for standard and advanced depreciation treatments.
- CMI Software, Inc. - CMI Fixed Assets
- CMI Fixed assets is a flexible and highly customizable asset de-preciation and management system that offers full support for all standard depreciation and averaging treatments, with the ability to maintain up to 25 books per asset, and tools for managing all asset life events through individual and mass acquisitions and disposal methods.
- Intuit - ProLine ProSeries Professional Fixed Asset Manager
- Intuit’s been busy over the past few years, introducing a new web-based professional tax compliance system (ProLine Tax Online), tax research and website development services, plus strengthening many of the available add-ons to the ProLine ProSeries Professional Edition tax system, including its document management, eSort, workflow management and client organizers. The company also offers the ProSeries Fixed Asset Manager.
- MoneySoft - Fixed Asset Pro
- The Fixed Asset Pro system from MoneySoft is a stand-alone asset depreciation and management program that can handle any number of assets for any number of businesses, with support for all traditional depreciation standards, including several variations of MACRS, ACRS and straight-line, with up to six schedules/books per asset.
- Pro-Ware - Asset Keeper
- Asset Keeper is one of only a very few fixed asset management systems specifically designed for use by public accountants serving multiple business and individual clients. Designed by CPAs, the program can be used to manage any number of clients and assets, with the ability to manage asset groups for subsidiary business units.
- Red Moon Solutions - Fixed Assets Manager
- The Fixed Assets Manager (FAM) system from Red Moon Solutions is a comprehensive asset depreciation and management application that offers broad financial and tax reporting capabilities, extensive tracking options and strong reporting in a flexible and scalable package that is available both as a traditionally installed program or as a hosted solution.
- Sage - FAS 100 Asset Accounting
- Sage’s FAS Asset Accounting system is the most widely used asset management program on the market, offering automated asset depreciation management capabilities for businesses with any number of assets, providing full support for IRS, GAAP and IFRS accounting standards, and giving users advanced asset life cycle tools.
- Thomson Reuters - Fixed Assets CS
- The Fixed Assets CS system from Thomson Reuters follows in the tradition of all of the professional tax, accounting and practice management systems in the CS suite, providing tight integration with the vendor’s trial balance, tax and write-up programs, and providing a comprehensive and flexible depreciation and asset tracking application.
- WorthIT Software - WorthIT Fixed Assets
- WorthIT Fixed Assets offers one of the more comprehensive systems on the market, providing asset management, depreciation accounting and capital budgeting functions for managing assets over multiple locations, tracking costs by project or company subdivisions, following assets during manufacturing, and making projections across multiple years.
-- Related Article --
- Tracking Systems Aid in Asset & Inventory Management
- When tax and accounting professionals think of fixed asset management, most instinctively think about taxes and depreciation methods. When business owners and managers think about their own assets, however, they are more likely to think of more tangible aspects, such as the usefulness of the investments, when they need to be replaced, and whether any disposed of or missing assets may still be on the books.