I have a client who has used the Sage FAS solution for over 10 years and has recently implemented an ERP system internally for company wide integration. His struggle: Tax depreciation for fixed assets. We did explain that many ERP systems fall short when implementing the fixed asset module; especially where tax computation is concerned. Sometimes however, IT and internal policies provide you no choice.
Our large manufacturing client (who remains to be anonymous – though granted permission to publish) emails me the following:
We are working on programming US tax depreciation logic into our new ERP system. At the moment, the results are marginally satisfactory. It will not be nearly as good as FAS, but we knew that going in. Our internal contractor has cleaned up the FY 09 data. Our starting point should be clean. But going forward we have no good solution for correcting data or tracking tax law changes. After the transfer, we will probably start to find where other problems are.
So thanks for staying in contact. We may need to migrate back to FAS at some point.
ERP systems and the complete integration behind it all is pretty fabulous when it all jives, but when leaving out a CRITICAL factor such as Tax rules, or without ever extending bonus depreciation options required to calculate required tax reporting for fixed assets, nothing quite compare’s to a system that is automated and keeps up to date for you by inserting a CD or downloading the update. For additional research on deciding whether or not to use ERP fixed asset modules, check out my other posts with a similar flavor: ERP Fixed Assets and Tax Depreciation.