Most companies look at the initial costs associated with a fixed asset inventory service and a fixed asset management software solution, but fail to realize the bottom line benefits of a successful implementation. The focus should not be on the cost of the solution, but on the cash flow benefits of not paying unnecessary taxes and insurance premiums. This actual return on the investment in the project often gets overlooked.
Top Economic Benefits
- The solution typically pays for itself. A complete implementation typically uncovers at least 15-30% unrecorded retirements in an organization. Correcting this discrepancy results in an immediate write off, reducing income taxes, property taxes, and insurance premiums.
- Audit support. Records are now more accurate, tied directly to a tagged physical asset inventory, updated annually, and facilitate auditing tests. Compliance with provisions of the Sarbanes-Oxley standards are also enhanced.
- Decrease carrying costs. More efficiently gather and maintain accurate information on fixed assets.
- Reduce property taxes. Only pay taxes on assets that are at the location. This is especially important when a firm has multiple facilities located in different tax jurisdictions with different tax rates and exemptions.
- Avoid unnecessary purchases. Increased control over spending money on additional equipment by reassigning and utilizing idle equipment instead of purchasing new.
- Leased equipment tracking. Avoid lease termination penalties by simplifying the process of tracking, locating and returning equipment when the lease term expires.
- Accurate insurance premiums. Eliminate the concern that the firm is over or underinsured. Match your insurance coverage and premiums with the actual assets.
We realize that we bring this topic up a lot… but some people still need convincing. So we believe it’s our job to keep hitting it home.