It’s obvious that companies utilizing an ERP for their fixed asset depreciation and management are getting frustrated – or perhaps they are just now seeing the benefits of implementing a true fixed asset module. Because of this many are asking what or how do we update FAS Asset Accounting or keep both systems in tune. Maybe it’s best to just explain what the choices are and we can move on from there.
With this being said, I thought I would explain the two options in a basic format – without giving away all of our knowledge. After all, this is why we get paid the big bucks – but not as big as an ERP Consultant.
When implementing a true fixed asset system to work with your ERP system, you have two options:
- ERP Parent—FAS Child: Maintain GAAP/Internal depreciation inside ERP asset management and only Federal Tax, AMT and State books in Sage FAS Asset Accounting. Activity added/updated in ERP, exported out, format updated, imported into FAS AA. Recommended that you also maintain the GAAP/Internal book in Sage FAS Asset Accounting but only for reconciliation purposes.
- FAS Parent—ERP Child: Utilize Sage FAS Asset Accounting for all depreciation—export entries out of AP/PO in ERP. Upload into FAS, maintain ALL activity in FAS Asset Accounting (no need for disposal and transfer tagging), book depreciation entries into ERP GL. No reconciliation necessary between ERP asset management and third-party solution.
From the sounds of it, you would sway towards option 2 – FAS being the asset keeper, organizer, etc. However, many organizations can’t step away from the ERP being finances Parent / Controller — so then, we are left with implementing option 1. Either way, it’s far better than what occurs when you DON’T use a third-party solution to run, capture and report on federal tax and state calculations.