Fixed Asset Inventory and Disaster Recovery

Insuring your fixed assets is useless if you aren’t prepared to substantiate your cliams when your worst nightmares come true.  Does your recovery plan include YOUR valuable fixed assets?

Del Papa Distributing is celebrating 100 years distributing fine beer and beverages across 17 counties in Texas. The company sells more than 10 million cases each year from three distribution centers and employs more than 340 individuals. To ensure its numerous assets are efficiently tracked and accurately accounted for, Del Papa Distributing relies on Sage FAS Fixed Assets software and Paragon Systems. Recently, the company sought to better control its assets through a barcode system, and contacted Paragon Systems, a Sage business partner specializing in the implementation of asset management and asset inventory applications.

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“We have a large number of assets throughout the company and tracking them by barcode makes good business sense,” says Crystal Bryan, director of accounting services for Del Papa Distributing.

“Barcoding speeds the count of assets and the simple presence of an asset tag on a piece of equipment lets people know an asset is being tracked,” Bryan explains. “We looked at several other asset tracking systems, but selected FAS Asset Inventory for its capabilities and also because it integrates with our existing asset accounting software. The integration helps us to maximize our overall investment in technology.

How did we (Paragon Systems) help Del Papa get back on track?  What should you be thinking of?  Read the full article…. Fixed Asset Inventory and Disaster Recovery

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.

Baseline or Dynamic Asset Inventory?

When discussing someones upcoming physical asset inventory with them…  “Angie, we are just going to take our outside fixed asset listing of all our capitalized assets from [insert: CPA firm, outside agency, head department, etc.] and use that to FIND and TAG our assets.  We don’t need to do a Baseline because we already have a list.”

Really?  I don’t like to be frank and when I am, I am very diplomatic.  But honestly… the whole reason people come to me (or my other associates at Paragon Systems) is because they DON’T have a CLEAN list – or one they just adopted one.  The whole point is to gather data, reconcile back to accounting records and GET a clean fixed asset list. Why?  To continue to keep it clean so they know what they have and what they don’t.  There are many benefits to a clean and successful inventory.  Ok, getting off my soap box. . .

May I please share with you the reasons why you SHOULD NOT conduct a Dynamic inventory of your fixed assets if you don’t have a GOOD list — or one that hasn’t been yours?

  • List Integrity – the whole reason that someone takes over (brings in-house) their assets is because their ‘outsourced/other’ list isn’t correct.  Right?  Right.
  • Timing – it’s going to take a LOT of time and man-power to look for every needle in your very large haystack. 
    • Individual timing: instead of taking an average of 3 – 5 minutes tagging and collecting data for one asset, it will take about 30 – 60 minutes.
    • Overall project timing: months and months and months of tagging and data collection.  Will you ever really finish?
  • Reconciliation – it is always easier and more efficient to conduct your reconciliation off-line back at your desk than on the fly in the field.  Once you’ve collected your data during a baseline inventory, you can always perform a comparison against your data in Excel.  This assists you with filling two (2) buckets: matched assets and unmatched assets.  You will be able to determine which assets you will need to investigate on (the not matched) much quicker AFTER collecting your data (via Baseline). 

Dynamic – GREAT option for those of you with a fixed asset list.  Upload your data into an automated hand-held bar code scanner (preferred method) and start your inventory.  Update any / all descriptive fields of information while you are in the field.  End result – validating your data in the field.

Baseline – You have no accurate list (or a list at all) or a highly imperfect one and you start tagging your assets to capture all the data about the asset.  Although it might seem obvious, make sure that you pre-define what information you will be collecting on your assets before you go willy nilly.  End result – building your list.

Bringing my point home.  Why spend days, months or even years hunting for a needle that may not even exist at the end of the day?  If you have a list you DON’T trust (or one at all), go Baseline!  Who wants to start over?

More information on the differences between a Baseline and a Dynamic phyiscal inventory.

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!

Anyone Missing Fixed Assets?

Recently myself and another senior fixed asset consultant went on site for a discovery meeting at a prospects who are having issues with controlling their fixed assets.  Some were tagged, some were not.  Those that are/were tagged had different types/formats of tag’s, etc.  They have about six (6) locations throughout the United States and have their fixed asset data in about 8 different Sage FAS companies — each one set up a little different.

Their computer equipment assets that were getting ready to be disposed of.  However, some had tags, some didn’t… not all were recorded to accounting — and if/when they were… they didn’t always have a unique asset id number to use. 

After about a two (2) hour discussion about their upcoming project and what the best approach would be, my associate and I walked out the front door… and a TON of their fixed assets were too!  Guess what, they didn’t know.

Best practices of conducting your own physical asset inventory – free webinar.

Sage FAS Asset Accounting vs Sage FAS Asset Inventory

After many years of confusion amongst the masses, I’m here to set it straight on the differences between Sage FAS Asset Accounting and Sage FAS Asset Inventory.

Say it simple….

  • Sage FAS Asset Accounting is simply the ‘depreciation engine’ of the Sage FAS family.  Asset Accounting is where all the action happens from running depreciation, disposing and transferring assets to providing you with the paper trail necessary to track all your fixed asset movement.  FAS Asset Accounting also keeps you current on all the federal tax rules and regulations, as well as provides you with the necessary filing forms: 4562, 4626, 4797, 3468 and the 4255.
  • Sage FAS Asset Inventory is the automated reconciliation engine of the family.  Asset Inventory allows companies to physically track their fixed assets with the use of industry leading bar code scanners and custom bar code tags/labels.  Once you have collected all your data out in the field, FAS Asset Inventory can receive the data electronically from your bar code scanner and then allows you the flexibility to automatically reconcile your results — which in turn will update your data.

The wonderful thing about the Sage FAS family of solutions is that they can either: work separate from one another, or integrate ‘seamlessly’.  With that little bit of knowledge, FAS Asset Accounting and FAS Asset Inventory can be, and are seamlessly integrated, using the same database and companies.  Therefor, when you perform reconciliation in Asset Inventory, the changes you make to your assets will show in both solutions, Asset Inventory and Asset Accounting.

Obviously, there are other ways that the two integrate… but I’ll leave that for another day.

Fun Fact: Sage FAS is, and has been, the leading software that provides true, full-circle fixed asset management!

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