What Does Fixed Assets Software Do?

1. Maintain strong data controls

It’s not uncommon for most of an organization’s fixed assets data to be incomplete or inaccurate. Fixed assets automation software can help tax departments more easily manage all fixed assets data from a single source and automatically reconcile your latest inventory data from multiple systems. Without manually reentering data, you can reduce errors and gain visibility across your entire business.

Today’s fixed assets software does more than ensure compliance and can be an integral part of an organization’s strategy for maintaining operational effectiveness, efficiency, and reliability in financial reporting. Key internal controls and built-in features add safeguards to protect against bad data or errors such as asset duplicates or inconsistencies, including:

• Detailed documentation capabilities
• Validation controls
• Process and sign-in audits

2. Customize reporting capabilities for advanced audit protection

It can be difficult and time-consuming to create regular, flexible reports that allow for asset type and class depreciation for different scenarios. Some businesses need to find creative ways to explain and reconcile differences in the data.

Fixed assets software can provide added audit protection, whether from the IRS or for your own internal processes. Real-time documentation ensures you always have the crucial information you need for complex audits and other data management demands.

3. Improve cross-department data sharing and visibility

Today there’s a greater need for real-time visibility between departments that handle tax and GAAP accounting books. But sharing crucial tax information across departments is difficult with older enterprise resource planning (ERP) systems or custom spreadsheets, which lack the level of detail needed for safe compliance. They lack support for GAAP and tax depreciation, audits, and tax law updates, and can make data extraction and reentry a tedious necessity. Plus, organizations often turn to IT departments to update their ERP functionality and customize data, causing delays and strained resources.

Integrated fixed assets software lets you draw and standardize data from many sources and systems, meaning accurate data can be accessed and shared between tax and accounting departments.

4. Reduce miscalculations with built-in accuracy and compliance mechanisms

With time-consuming, error-prone, standard spreadsheets it’s easy to overlook tax law updates that can lead to costly miscalculations. Plus, without visibility and automation for critical functions, spreadsheets present a continuity problem when the spreadsheet’s owner and knowledge base leave.

Fixed assets software can reduce your margin for error with built-in accuracy and compliance mechanisms that follow the latest tax code, accounting rules, and tax law updates. This way you can have confidence running complex calculations involving cost segregations, tangible property regulations, and other detailed functions.

5. Accommodate increasing fixed assets data volumes and complexity

When assets are tracked across multiple locations and tax jurisdictions, the amount of data increases—as does the need to accurately manage it. But collecting and updating massive amounts of data from different systems and sources can be overwhelming. To keep up, many tax departments turn to outside firms to collect, standardize, and reenter data into the appropriate systems to then perform calculations.

The best fixed assets software is scalable, flexible, and customizable so you can adapt to changing business needs—including corporate structural changes, mergers, or acquisitions. As your organization evolves, your fixed asset software should easily accommodate more complex fixed assets data.

It’s important for organizations to consider both immediate and future data collection needs and implement fixed assets software that can accommodate increasing fixed asset data volumes and complexity.

6. Optimize tax planning and processes with actionable data insights

As tax departments attempt to close their books, they regularly face inefficiencies and obstacles that leave them with little time for analysis or strategic financial initiatives. Manually managing and tracking asset transfers, disposals, and additions takes time and increases the risk of errors that can lead to missed deadlines for period-end closings and a staff that’s stressed and stretched thin. Tax planning, data manipulation, and reconciliations can be significant resource strains.

Your fixed assets software should give you a complete, detailed picture for reporting, tax savings, compliance, and critical business decisions. With actionable insights, what-if analysis, and scenario-building capabilities, fixed assets software can help you gain even more visibility and insight across the entire business so you can optimize your tax planning and processes.

Tax automation software can solve many headaches for your tax department. No matter your company’s size, number of fixed assets, business units, or locations, automating your fixed assets process will help you improve productivity and avoid costly errors by managing the complete fixed assets lifecycle—from construction and purchase to retirement.

ABOUT THE AUTHOR:

Evan Croen is senior vice president of product for Bloomberg Tax & Accounting.