4 Keys to Complete Fixed Asset Management
Fixed asset management is a practice worth its weight in future business growth.
Research from Sage shows that 80% of Fortune 500 firms list fixed assets as the largest line item on their balance sheet. This highlights how vital fixed asset management is to a successful business.
Given the current state of the business world in the current pandemic, fixed assets have become ever more important in a remote work environment as well. Managing remote assets effectively is vital to ensuring you can meet, and even exceed customer expectations.
This topic was discussed at length during our recent webcast, “Managing Every Step of Your Fixed Assets Lifecycle.” During the webcast, we highlighted four key areas that must be addressed to ensure you have a complete, holistic view of your fixed assets.
Here’s a quick look into those areas:
1) Proper Planning
Planning enables companies to forecast the assets they will need to drive business months down the line. With tools like Sage Fixed Assets, businesses can easily manage and report on their CIP projects.
This means that when you do a PO or invoice of some sort in Sage 100 or Sage 300, if that asset is going to be placed directly in service, it would go straight to the depreciation side. If it’s part of a project or CIP, it would go in the planning module, where you will be able to:
- Report on all roll up costs tied to that for materials, labor, and more;
- Report on your spending against budget; and
- See the actual spend against the original and revised budgets.
2) Understanding Depreciation
Tracking the depreciation of your fixed assets helps you manage the financial aspects of your assets throughout their lifecycle at your company.
For example, if you purchase some equipment —hardware, furniture, fixtures, etc. — which is not part of a project, it may go directly in service where it needs to go through the depreciation cycle and calculate for tax, gap, state, AMT, or any other scenarios you may need.
But in some environments, you may have assets you’re purchasing that need to go through some type of CIP phase. In this case, you’re going to have various accumulated costs included before its used. But for those of you that may have CIP before they become fixed assets, you will need to be able to handle depreciation calculations for all your books. You’ll also need the ability to handle transactions such as transfers or disposals throughout that depreciation process.
3) Appropriate Tracking
The next area, which not everyone recognizes, is taking physical inventories of your fixed assets. This is an excellent way to ensure that you actually have what you have and know where they are. You can leverage barcode labels through tools like Sage Intacct and complete those physical inventories at semiannually, annually, or bi-annually rates.
4) Accurate Reporting
Finally, formulating a streamlined reporting process provides robust capabilities on the entire fixed asset management process.
Businesses must be able to report on all the above, which means you will need robust reporting either built into those components, or the ability to create custom ad hoc reports as needed to ensure you have the ability to report on the entire process.
There is A LOT to keep in mind when managing your fixed assets. However, that doesn’t mean it has to be hard. Sage Fixed Assets has all the features and functions you need to keep all these key areas of your fixed assets in check.
Brian Anderson joined BrainSell as the content marketing manager, but unknowingly became our in-house troubadour as well. Armed with his natural affinity for words – thanks to his B.A. in Journalism from Hofstra University – and editorial experience, Brian’s ability to generate high-quality contentView Posts
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