Not All Sage FAS Users Should be Created Equally

Here at Fixed Asset Consulting, we have been performing many data conversions lately.  Mainly data that has been in the Sage Fixed Assets Depreciation (formerly Sage FAS) and was outsourced.

The biggest problems we are running into during our analysis and process is that those ‘outsourced’ professionals who are using the Sage Fixed Asset System (or any automated fixed asset system) are not entering the asset information in correctly.  Here is a list of what we have been seeing (note: not all the data we are analysing and fixing are from the same source/end users):

  • Bonus depreciation not being utilized consistently.  Some assets have it on, others don’t.  Same property type, same placed-in-service year, etc.
  • Bonus depreciation not being used at all even though the Client is claiming in on their tax returns.  This means that even though the Tax calculations are outsourced, the Client still has to perform off-line adjustments and calculations on a spreadsheet.
  • Inconsistent data entry and misuse of critical depreciation fields.
  • Property Types are incorrectly used. I.e. Buildings and building remodels are set to Personal Property with a 39 year life and a straight-line method.  Should have been set to Real Property.
  • Adjustments were never taken and trued up on the data.  This is causing a lot of over and under depreciated assets to occur at the end of the assets life, creating a NBV on a fully depreciated asset.
  • One line items that represent 3 or sometimes 10 assets.  When reconciling this information back to the customers off-line data or internal data, some of those “assets” where disposed of.  Or… the sum of the 3 assets don’t equal the total amount of the one asset in the outsourced system.

We could go on and on, however, many times this stems from the end-user not being professional trained on the system, being thrown into fixed asset management role without training, not communicating properly with their clients or just not knowing what they are doing.

Not all fixed asset users or those managing fixed asset data should be created equally.  Problem is, many don’t know this is happening until it’s too late.  Don’t be one of them.

Rolling Out Large Fixed Asset Management Projects

It’s that time of the year again when companies (large and small) are just starting to think about their year-end processes (or just finished with them and their Auditors) when fixed assets come into play.  Property tax season is now coming upon us all and shortly thereafter… tax filing.  

When getting ready to prepare for this type of fixed asset management project, people tend to have a mini (or large) freak out.  I want to remind you all that you don’t have to bite off more than you (and your budget) can chew.  Have you ever thought about breaking your project out into prioritized phases?  Below is an example of the kind of a approach you can take to complete your full fixed asset management project.

Real World Example

Background: Company XYZ is a large fortune 500, multi-location, publicly traded company.  They have well over 50,000 assets within the U.S. 
Current Issues they are facing:

  1. No automated system to calculate their TAX, State and AMT depreciation calculations = hand calculated (spreadsheet formulas) and delayed filing and delayed provisions. (P.S. they are using an ERP solution)
  2. Inaccurate fixed asset listings – due to never performing a physical asset inventory or reconciliation = leads to inaccurate:
    1. Property Taxes and delayed filing
    2. Improper insurance coverage
    3. Financial reporting
    4. SOX 404 Compliance risk
  3. Multiple locations that need an inventory with bar code tagging = thoughts of many, many dollars run through their minds.
  4. Lack of policy/procedures = lack of maintaining accurate fixed asset records.

Recommendations to perform an ACCURATE and MANAGEABLE fixed asset project.

Priorities for this Client were to get their federal Tax, State and AMT calculations automated.  We based their project off of this high priority. 

  1. PHASE ONE: Implement an automated fixed asset accounting solution (Sage FAS 500 Asset Accounting was used).  Finalize this project implementation, work through the data and get it live for use.  Ran their 4562’s, 4797’s, etc.  Receive an immediate return on the software and implementation costs.
  2. PHASE TWO: Start to roll out the physical asset inventory project  through a pilot program.  Starting small — prioritized the PILOT by number of anticipated fixed assets and activity.  Finalize and reconcile this data to observe the findings and obtain an immediate cost recovery on project.
  3. PHASE THREE: Perform the physical inventory on the other locations that were necessary – again, based on priority.  Reconcile results – find and capture the return on investment by property tax savings and insurance premiums. 
  4. PHASE FOUR: Implementation of an automated fixed asset inventory solution that supports the use of bar code readers / technology (Sage FAS 500 Asset Inventory was the solution of choice).  Now the Client can maintain the clean database and keep it maintained with annual physical inventory audits, etc.
  5. PHASE FIVE: Consulting on on-going use / maintenance of the fixed asset solutions and complete management.  Set in place policies/procedures and train staff on the workflow and systems where necessary.

Working with a Phase approach to fixed asset management works to keep it manageable.  Not only is it manageable for your staff and your business… it’s also manageable for your budget, as each phase pays for itself at the end.  Every step of success opens doors for more.

New FAS Asset Accounting v2012 Coming in September

I am finally back into my humble office after attending the Sage Software Summit 2011 with an immediate trip to some customers out in Boston and Maine, now playing a serious game of catch up.  Ugg, one thing is for sure, when you leave, nothing just stops and goes away. 

What I wanted to bring to everyone’s attention is the new version of Sage FAS (v2012) that will soon be released – starting in mid-September.  Sage FAS division had a handful of breakout sessions @Sage_Summit letting both Business Partners and Customers play around with the latest version – one even showcased the ease-of-use on customizing the new interface and layout.  Feedback was a-m-a-z-i-n-g!  I myself am extremely excited to start implementing it world-wide.

Some of the changes to the Sage FAS Asset Accounting software that I (and my customers) are excited about are:

  • The capability to perform Task Based functionality (like you do in Outlook).
  • Ability to drag and drop columns in the Group View – now appropriately named: Asset ListNew Sage FAS Asset Accounting v2012 Layout.
  • A user can now drag the general field section (in Asset View/Detailed View) down to view all the fields as needed – seriously, this is a HUGE one for every user.
  • Capability to UPDATE asset information through the custom import wizard – this is the big dog!
  • Much, much, much more…

I don’t have all day to type out this blog entry so I am trying my best to keep it short and sweet and highlighting only a handful of things I and you will love about the upcoming release of Sage FAS Asset Accounting v2012.  It may seem a bit young for a facelift… but 14 [personal] years in the business — well, in software years, that facelift is long over due.  To Sage FAS division I say – GOOD JOB and way to be the best plastic surgeon in the U.S.!

Love Your Assets – Tag Em’

Do you truly love your fixed assets?  How about giving them a Valentine today and get serious about conducting a physical inventory!  Sounds romantic doesn’t it.

Ask yourself this question, has your business or organization ever conducted a fixed asset inventory audit?  Is your answer no?  This is all too common.  What everyone doesn’t understand is that knowing what you have and what you don’t have is a really big deal and greatly impacts your budget amongst other benefits.

Not only does conducting an inventory audit ensure your accuracy of asset information on your books, it also sets a best practice of managing your assets.   Before you even think about starting your inventory, you need to make sure you have everything planned out and ready to be executed BEFORE you (or anyone off the accounting street) hit the floors with a clip board and some inventory tags.  This will turn out to be a disaster!  A few things to think about prior to auditing:

  1. Company-wide Participation — Make sure everyone and all departments are on board with this project.  If not, this project will fail before it even gets started.
  2. Asset Tagging — What are you going to tag?  Where will you place the tag? How many tags will you need, will they be customized?  What about the starting sequence?  The best one… what TYPE of tag are we going to implement?
  3. Data Collection — What information will be obtained when we are out there?  Where in the heck will all this information go both in the field and out of the field?
  4. Reconciliation — Now that you’ve collected your asset data, make sure you match to your original records and CLEAN THEM UP.
  5. On-going Management — Now what’s your plan for the future?  Don’t take all that time to clean just so you can get dirty again.

Now that you have shown some love to your fixed assets — nothing says you really care like an automated full circle fixed asset management solution!  No, spreadsheets don’t count here – nor do clipboards.  What should you choose?  Hahahaaaa… well, Sage FAS Track Pack with industry leading bar code readers of course!  Email me a valentines asking how you can get started showing the love.

From my assets to yours, Happy Valentine’s Day!

Nice Assets – Wait, What Are Fixed Assets?

I would like to start this article off with a little story.  First of all, I fly a lot to go and do what it is I do – I mean everywhere (love United frequent flier status – you are welcome for the plug) often chatting it up with my flight compadre next to me.  Nine times out of ten we exchange our titles and ask each other what we do for a living.  My conversation often goes like this:

Me: “I sure hope we take off on-time”

Compadre: “Me to, I’m on my way [insert home or work]”

Me: “What do you do?”

Compadre: “Oh I’m a [insert anything but a Fixed Asset Consultant].  How about you?”

Me: “I’m a Fixed Asset Consultant.”

Compadre – with a smirk: “fixed assets hu?  Hahahhaaaaa!”
(depending on the personality of this person I either carry on the funny nuances of the words fixed assets or I move on)

Me: “Yes, I play on those words as much as I can. You’re funny.”

Compadre: “All joking aside, really, what is a fixed asset?”

Which leads me to discover that after 13 years of implementing fixed asset management solutions and writing workflow procedures for over 300+ companies (of all sizes), people still don’t know what a fixed asset really is or why they should care.  Sometimes, even those who take care of fixed assets.

So, what is a fixed asset? A fixed asset is really just a tangible asset like: land, buildings, office equipment, computer equipment, furniture & fixtures, vehicles and machinery / manufacturing equipment.  Every company or organization has them.  Then, they depreciate and based on what type of asset it is (personal or real), they depreciate on different schedules and methods.  Tax has different rules and regulations than GAAP.  If you are non-profit or government, tax is taken out of the equation.

Why are they important you ask? Don’t get me started.  Fixed assets help your business grow or assist in creating your product or service.  Mis-managing fixed assets brings a whole slue of problems like overpaying on insurance premiums or even worse… TAXES, you often end up with a higher total cost of ownership, RISK of non-compliance, missing out on income tax deductions and more (internal theft also comes to mind).

In a nutshell, if you don’t know what a fixed asset is and you don’t manage them properly you could be missing out on deductions for your business to keep growing!  These days, no one wants to go out of business or lay anyone off.  Pay attention to what you have – you could be doing your business a disservice!

I’m off to purchase another ticket to my next United destination to dedicate myself to more fixed assets!  Later.

Balancing SAP Costs Before Importing Into Sage FAS: Live Update 5

A couple of weeks have gone by and we are progressing nice and easy — on schedule and on budget.  Our client has multiple entities (with thousands of data) and we are finished balancing on one and about 95% balanced to another with only 3 more to go. 

The struggle has been with SAP and their transaction codes.  Current FY data is sometimes hidden – which is a small struggle, but we persevere!  Another small struggle for the client is trying to assist us in reconciling starting balances between what SAP could/can handle against what they’ve had to manipulate off-line out of the system.  Hence the reason they are implementing Sage FAS Asset Accounting – NO OFF-LINE ADJUSTMENTS NECESSARY!

Remember when converting and implementing any system for the first time, the VERY first thing you should do is pick a date to balance out to.  This ensures that no data gets left behind and you will have a clean start.

Sage FAS Asset Accounting: Release of Version 2011.1

The moment has arrived for all you Sage FAS Asset Accounting users out there (over 300,000 active users).  The release of version 2011.1!  Yes, it incorporates tax law changes made during the year including the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 and the Small Business Jobs Act of 2010. 

This release is only available for CURRENT Sage Support members and new licenses.  If you need to renew your support to take advantage of this slick automation and updated depreciation methods and provisions, call me now at (847) 2402981 ext: 164 or shoot me an email with the SUBJECT: RENEW.

The FAS 2011.1 Tax Update contains exciting new features and enhancements to your:

  1. Tax Law Updates: Sage has updated the Sage FAS program to comply with the latest tax law changes:  
  • Updated Tax Forms and Worksheets. The 2011.1 Tax Update includes the updated IRS Form 4562 – Depreciation and Amortization for 2010. 
  • Updated Tax Limits. The 2011.1 Tax Update complies with the scheduled updates to the Section 179 limits and luxury auto limits, including changes to allow up to $250,000 of the Section 179 deduction to be claimed for qualified real property.
  • 168 Allowance of 100% for Certain Property. Assets placed in service after September 8, 2010 and before January 1, 2012 can take a 100% bonus deduction.
  • Extension of Tax Provisions. The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 has extended several tax provisions, such as allowing a 15 year estimated life on qualified leasehold improvements, qualified restaurant property, and qualified retail improvement property.

2. Updated Audit Advisor. Sage FAS made the following updates to the Audit Advisor:  

  • Check for the increased Section 179 limits as stated above. 
  • Extend the check for Qualified Restaurant, Leasehold, and Retail Improvement Property. 
  • Added a new check for assets that claimed a 50% 168 Allowance when they are eligible to take the increased 100% depreciation allowance. 
  • Added a new check for real property that may be qualified for the Section 179 expense deduction.

3.  New Sage Timberline Enterprise Link. We have added a new general ledger link that enables you to post depreciation expense and accumulated depreciation from Sage FAS to Sage Timberline Enterprise.

NOTE: Please note that no database conversion is required to upgrade from version 2010.1 of Sage FAS to version 2011.1. However, if you are currently using an older version of Sage FAS, you must first upgrade to version 2010.1 before installing Sage FAS version 2011.1. 

If you DON’T have all the CDs or other material available for versions lower than 2010.1, you need a data schema upgrade.  Contact me today for competitive rates.

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