Challenges Centralizing Fixed Asset Management
There can be many challenges when a larger organization has centralized (or getting ready to) their fixed asset management. Typically, spreadsheets fall short when attempting to get everyone on the same page.
Automation. Automation with an integrated solution is the best thing you can do for fixed asset management. In particular, businesses with multi-locations struggle more than most. If you are one of those organizations that are maintaining and keeping records of fixed assets, with different fixed asset sub-ledgers and processes, these tips are for you.
Challenges to Overcome
- Multiple Spreadsheets and/or depreciation solutions.
- Missing data – no ‘requirements’ built into Spreadsheets.
- Workflow to track, maintain and approve asset disposals, transfers, 3115 changes, impairments, cost adjustments, etc.
- Emails with attachments get lost.
- Deadline/timing requirements for month end, quarter end, year end.
- Inconsistency in reporting data – or no ad-hoc reporting, period.
- Turn over in staff and/or ‘template’ use – who created this anyway?
- Tax consequences – where are the tax calculations going?
- Open Risk with asset activities and no accountability or history tracking.
Suggestions to Overcome…
- Revisit your Policy and Procedure Manuals. How long has it been since they were updated? If new software was implemented (Accounting and/or Fixed Assets), has it been reflected in your procedures? Take screenshots with step-by-step instructions. I always look at my manuals and ask myself… ‘would my mom be able to pick this up and understand each step with little to no questions’? If I answer yes, then I know it’s done and I can pass it along to my client. These will be particularly handy if you have staff turn over.
- Review all the systems and/or spreadsheet ‘templates’ that are being used. When were they created? Who updated and used them last? Are they all the same? Get everyone on the same page, provide training on how to utilize them properly before passed along. Think about an automated tool that is simple to use and will keep everyone on the same page. These tools should have the capability to rename fields, create drop-down lists, ability to lock down fields or create user profiles that can limit certain functionality.
- Timing – How many hours are spent each month at each location to finalize and provide an ‘accurate’ record of fixed assets. Where can you automate to speed up the process – and most importantly, cut back on errors? The answer to this question will show you the return on investment (ROI) on implementing a fixed asset solution. Find a solution that works for everyone and that has the ability to be customized to your business. When a solution is properly implemented with fields, drop-downs, templates, integration, etc., data entry or import should be quick and painless.
- Consistency – in data entry. Bulking vs individual asset records, properly estimated lives by a class code, consistent class coding, use of asset descriptions, etc. Are these currently reflected in your policy as well? Fixed Assets are constantly moving and need to be updated and revisited. The more you grow, the more your asset list grows, especially with multi-locations and multi-users! It’s important that each location is consistent with the next. You never know when it might make sense to consolidate your data.
- Reporting. Is each location producing the same ‘reports’ for fixed assets? Let’s face it, spreadsheets can be pretty cool and extremely in-depth .. but Excel is not a report engine. Many of my multi-location clients not only have to report internally but have many external requests for reporting as well. Auditing, Property Tax, CPA Firm, Insurance, SOX Testing, and so on. The more consistent the data can be… the more consistent we can get our reporting too. There are many fixed asset solutions out there, which one will provide you with the reports you and all your locations will need?
- Systems. Automate where ever necessary. A spreadsheet is not automation. Research ‘full life cycle’ fixed asset solutions – those that have integrated construction in progress (CIP, WIP, CAR) that feeds into your depreciation and tracking software. On-premise? Online? Integration with your AP/PO and GL solution is also something that needs to be considered. What makes sense to you and your business, is not the same as everyone else. Do your homework and select one that will grow with your business… no one wants to keep implementing new software all the time.
Hopefully, these tips will help lead you in the right direction. Be sure to include your team when researching a fixed asset management solution. People tend to accept change when they are part of finding the right solution.
Keep Smiling! A.Chase
Recommended Solutions for Centralizing Your Fixed Assets: Sage Fixed Assets and/or AssetFlow Data Entry. AssetFlow Data Entry from Fixed Asset Consulting is a cloud-based solution that can integrate into any automated fixed asset solution and is sold and implemented separately.