2009 Review of Fixed Asset Management Programs

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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