Cover Your Assets – Fixed Asset Tracking
How does your organization track its fixed assets? If your answer is,” I’m using Excel and it’s working just fine,” think again. Research has shown that as much as 64 percent of financial spreadsheet data contains errors, and that between 10 and 30 percent of the assets on the books were no longer owned. This can cost your organization money. Here we take a look at the reasons why a purpose-built fixed asset software solution is a good idea, and review Sage Fixed Assets.
We’ve mentioned that the data integrity of spreadsheet asset management is typically not good. Inaccurate assets data can cause you to overpay taxes and property insurance. Perhaps an asset is needed for a critical process, and the item you thought you had does not exist.
Did you know that asset misappropriation schemes are the most common type of fraud affecting small businesses? The best way to prevent fraud is to have accurate asset tracking and regular physical counts.
Electronic documentation is most effective way to prepare for an audit. Behind documentation is good data in which all transfers, disposals, and new purchases are recorded and saved. Data should be backed up often and multiple copies kept at different locations.
Ghost and Zombie Assets
Ghost assets are assets still on books that don’t exist. These assets can cause you to overpay on taxes and insurance, and experience lost productivity when needed items are missing or unusable. And since you didn’t know the asset was missing, you would not have budgeted for a replacement.
At the opposite end from Ghost assets are Zombie assets – those that are physically in use but not represented on the financial books. Negative impacts of Zombie assets include IT licensing issues, lack of insurance coverage, and a high potential for theft.
Did you know that eventually, 10 percent of companies will be affected by man-made disasters, and almost 30 percent will be affected by natural disasters. Without accurate fixed asset data, the organization will not be able to rebuild via insurance claims or governmental subsidies.
The Bottom Line
How does inaccurate asset data impact your bottom line? Here’s an example assuming a federal tax rate of 30 percent, a state tax rate of 6 percent, a property tax rate of 3.4 percent, and an average insurance rate of .01 per $1. Assuming the organization has 1.5M in assets with 15 percent ghost assets. an organization could be overpaying over $37,000 annually. You can plug in your own numbers at www.sagefixedassets.com/ROI
Sage Fixed Assets (Sage FAS) Benefits
Sage Fixes Assets software covers four major areas of asset management: planning, depreciation, tracking, and reporting.
- The Planning solution provides the ability to budget for new assets and place them in service. This is particularly useful for project-based organizations.
- Accurate depreciation is provided by the Depreciation solution to manage the financial aspects of assets through their useful life. More than 300,000 tax laws are accounted for in the software, with the ability to choose from over 50 different depreciation methods. An “Audit Advisor” checks data integrity and lets you know of potential conflicts.
- You can attach images to assets to provide documentation for insurance purposes
- The Tracking solution is designed to accurately manage the physical aspects of assets. It uses the same database as the depreciation solution, but adds a barcode scanner and labeling system to support fast and regular inventory of assets. 50 built-in reports for depreciation and tracking include ready to submit tax forms. Built in group and user security permissions ensure data integrity.
- The Reporting module is a full version of Crystal Reports® that allows you to customize any of the existing reports and to create new reports from scratch.
Integration with Sage ERP
Sage Fixed Assets can be recorded during your normal purchasing process in Sage ERP (Sage 100, Sage 300, Sage 500, Sage ERP X3) and the depreciation system can make automated GL postings.
Watch our on-demand recorded webcasts (listed below) for a first-hand look, Or call us to discuss this solution in greater detail.