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.

Press Release: Fixed Asset Outsourcing

New Fixed Asset Management Outsourcing Service Launches

Fixed Asset Consulting, LLC (http://www.fixedassetconsulting.com) launches new outsourced service for companies that lack the in-house resources or expertise to navigate complexities of fixed asset management.

EUGENE, OREGON – December 3, 2012 – Fixed Asset Consulting, LLC, a specialized consulting firm led by noted Fixed Asset Management expert Angie Bolton-Lyons, has announced the launch of its new Fixed Asset Outsourcing service. The new offering solves accounting and compliance concerns for companies who lack the in-house resources or expertise to navigate the complexities of Fixed Asset management.

According to Bolton-Lyons, the new fixed asset outsourcing service fills a huge gap in an underserved market. “There aren’t many fixed asset outsourcing options out there and even fewer with the level of experience that we offer. At a recent tax accounting conference, every CFO I spoke with said the same thing about their fixed asset management process: it’s a mess.”

After providing fixed asset consulting and technology solutions for nearly 20 years, Bolton-Lyons notes that for some companies, knowing how to manage fixed assets isn’t enough.  She says, “Many of our clients also need someone to take control of and ‘own’ the process itself – reconciling assets, creating depreciation calculations and journal entries, and generating reports for state and federal requirements.  That’s where the new outsourcing service comes in.”

The new Fixed Asset Management Outsourcing service begins with cleaning up and organizing existing fixed asset data, followed by:

  • Generate depreciation schedules and fixed asset registers
  • Generate reports for book, state, and tax purposes
  • Create journal entries for general ledger postings and reconcile back to financials
  • Provide tools and processes for tracking new fixed assets and disposals moving forward
  • Provide year-end audit support including Form 4562 and other documentation for tax purposes

The most convincing argument for outsourcing fixed asset management goes beyond compliance or convenience. Bolton-Lyons also points out that the ROI is tremendous. “When clients see how much time and money we help them save, they’re convinced.  In most cases, we’re able to accelerate deductions and generate more allowable expenses, all while reducing their administrative overhead. They also appreciate the peace of mind that comes from knowing their fixed asset accounting is accurate and compliant with current tax code.”

Fixed asset outsourcing is available on a monthly or quarterly basis and starts as low as $89 per month depending on the number of assets to be managed.  Bolton-Lyons says, “We’ve set a low barrier to entry and are providing businesses with an option they may not have considered or even known about. You can simply go on with your daily business activities and still get the benefit of expert fixed asset management at a price that’s extremely affordable.”

Go online to http://www.FixedAssetConsulting.com to learn more about the company or their new fixed asset management outsourcing service.

About Fixed Asset Consulting, LLC

Offices located in Eugene and Portland, Oregon as well as San Diego, California.  Providing fixed asset management solutions, such as the Sage Fixed Asset product lines, training, data conversions, physical asset inventories, fixed asset management outsourcing services, and a wide array of additional fixed asset consulting services for almost 20 years.  Serving small, mid-sized to large Fortune 100 companies all over the United States and other countries when necessary.

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Fixed Asset Reconciliation Queries: Building an IT Inventory Template

Guest post by www.assetgurus.com:  First in IT Asset Inventory and Audit.

This tutorial outlines 3 useful and extendible queries that can be run against the General Ledger, including a step-by-step guide as to how to enhance your General Ledger’s capabilities with outside data, including fixed asset reconciliation to the Fixed Asset Register.

This tutorial and attached example Access database covers the creation of 3 queries to answer the following 3 questions about the General Ledger:

  1. What is the percentage breakdown of cost by Vendor?
  2. What is the cost-breakdown of each IT Asset-Type within a given set of types?
  3. What is the cost-breakdown of each IT asset type grouped by Cost-Center ?

General Ledger

In its most basic form, the General Ledger is a list of the purchases your firm makes.

Here is an example:

Grab this attached Access file (unzip first) and take a look at the tables and queries as you make your way through this tutorial.

ExampleGeneralLedgerWithQueries.zip

In this post, we’re considering a small but growing business, from the point of view of their General Ledger, looking to perform a fixed asset reconciliation and build an IT inventory template.  Above, we see their first Purchase Order of 4 items, to set up a single employee with key IT assets to generate and sustain business-function.  We will watch this business grow by way of adding new POs to the General Ledger, and simultaneously extract important data from it.

Specifically, we will create 3 reports (in the technical parlance: queries) concerning this data.

Constructing the Queries

1.   What is the percentage breakdown of cost by Vendor?

In useful terms for a busy CEO or CTO, to whom does money flow to for procurements and services the business needs to function.

Example:

Currently, there is a single payee for the firm with all procurement cash flowing to that manufacturer.  As we grow the General Ledger, we will fill the above with data automatically.  This is an example of an automated report, or query, we can run against the Journal to get useful, actable information.  However, this is the simplest of the 5 reports we will describe.

2.   What is the cost-breakdown of each IT Asset-Type within a given set of types?

>Our General Ledger does not include Asset-Type as a column, so we will have to extend the columns of the Ledger with a look-up table, which will look like so:

There are 2 scenarios that we can put a simple table like this to work to gather information about assets in an organization

Scenario 1 is the easy case, where we can send this table to the vendor as the PO is issued, and the vendor can deliver a spreadsheet with their physical info recorded.  A best-case scenario looks like this:

HP sends this table along with 2 new laptops:

If we could get this data from the vendor, we could import into our expanded General Ledger (now has an Asset-Type field).  In the example Access database, this expanded Journal with the second PO is called [General Ledger with Type Column].  We don’t have anywhere to store the Pre-Applied Barcode yet, but we will make use of the extra field that the vendor could provide us with later.

Let’s consider Scenario 2.  If we can’t get any type information for our General Ledger, we’re going to have to manually enter it.  Let’s talk strategies for manually identifying Asset -Type in the General Ledger:

For the existing case, with 6 items, it would be easy to go through and simply assign the correct Asset-Type to each row. 

  • When we scale up the General Ledger to 100 or 1000 or 10,000 rows, we need a more efficient method of grouping rows. This is when we want to use bulk filtering to try and isolate different asset types. 

  • Once the ‘Laptop’ word is filtered for, it will show only descriptions containing the word ‘Laptop’.  Then, simply apply the correct Type-Code.  Rather than enter data for each row, use Find and Replace to optimize your workflow.  Tip:  Access doesn’t like ‘replacing’ into an empty field, so you may need to have a default value to replace when you filter for blocks of assets.
  • Eventually, you will run out of neat description keywords to filter by, and you’ll end up with the Ledger corner-cases.  Depending on how your description is populated, you may also have reams of line-items that are not in-scope for the report you’re trying to create.  Put another way, you may not have a Type-Code for line-items like hard drives or individual sticks of RAM.  These could have an out-of-scope Type-Code applied to them, like M000. 
  • There are numerous other strategies to speed up manual matching of General Ledger rows to look-up tables, and entire blog-posts could focus just on these techniques.  In general, focus on speed and efficiency to complete the typing, and use grouping via filter or Find and Replace to make your life easier.  Back up your progress regularly, especially if you’re using Find and Replace.

Once we have completed the matching of General Ledger rows with Type-Code, we can run our query to roll up the Purchase Price of the assets totalled by Asset-Type.

In its simplest for, this query looks like this:

Another neat thing we can do in Access is look at the Asset-Types lookup table and expand each Type-Code to get the matching rows in the General Ledger.  Note that the LedgerID acts as the General Ledger’s primary key, or unique row identifier. 

3.   What is the cost-breakdown of each IT asset type grouped by Cost-Center ?

For the last query we’re going to explore, we’re going to kick it up a notch and pull asset information from beyond the General Ledger so that we can incorporate real-time location information about the asset in its deployed environment.   Specifically, we are going to find out what Cost-Center each asset was assigned to (in this case, choosing between: IT Helpdesk, Factory Operations, Software Development, Sales, and Marketing) by performing a fixed asset reconciliation to the General Ledger.

To access current asset information, like where it is and to whom it is assigned (including what department/Cost-Center), we need to have our General Ledger connect with the Fixed-Asset Register.  We’ll need a unique field that both these tables share, so we need to go back to our vendor import spreadsheet from above and include the Pre-Applied Barcode in a new, modified version of our General Ledger.

In the attached Access example, the tables are:

  • General Ledger with Type Column and Barcode (with 3 additional DELL laptops)
  • Fixed Asset Register

This template for a Fixed Asset Register is extremely simple, with only a Barcode field and the Cost-Center.  Normally you would also include physical attributes like serial number or location detail.  For our purposes, we’re only concerned about the department the device is assigned to, so we’re going to ignore these other columns. 

The Fixed Asset Register looks like this:

Fixed Asset Register

Our new query which will show us Type Totals grouped first by Cost-Center, then by Type, looks like this:

Cost Breakdown By CostCenter and Type Example

IT Inventory Template

Now that we have build a method for connecting up the Fixed Asset Register to the General Ledger, we have created much of the IT Inventory Template necessary to physically collect information from the enterprises’ facilities for the purpose of validating the General Ledger, via fixed asset reconciliation.  It’s important for a firm to have a well-defined IT inventory template with a data-refresh at least every other year.  Preferably, the Asset Repository (and thus, the Fixed Asset Register), would be updated every year or rolled through in part every month.

Mastery of the information flowing in and out of the General Ledger gives the Asset Manager surprising visibility into the asset-landscape to power executive decision-making, procurement, cost-benefit analyses, and productivity-maximization. 

 While the SQL statements that power our 3 queries above are beyond the scope of this document, please download and play with the attached Access database.  Click on the SQL icon at the lower-right of the screen when you’re viewing one of the queries in the database and see the SQL code that generates the query tables.

SQL Access Icon Example

If you want to understand the connective tissue of each statement, try Googling the keywords and syntax in the simplest query, and work your way up from there. If you have SQL gurus or DBAs on staff, have them use this example database as a template for building these queries (and more) to act on your General Ledger.

Post your questions and comments here.  Remember, this tutorial only scratches the surface of what is possible with your fixed asset data.

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.

Maximize Your Investment

“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

Top 5 Ways To Find Money Through Fixed Assets

Wow… today the stock market crashed so big it has probably got us all thinking… where do we go from here? Which also gets me thinking — how can businesses find some cash flow so they have some “rainy day funds” (or for operating expenses) in their back pockets?  Then it dawned on me… if they manage their fixed assets properly and received detailed cost segregation studies or had a proper 3115 study done, then shoot, EVERYONE could have extra cash flow.

If you think about it, there really are many ways to capture extra cash flow through fixed assets.  From very small efforts to large.

Top 5 Ways Fixed Assets Can Capture or Re-capture Cash Flow

  1. Cost Segregation Studies – extra Tax Deductions with properly classified fixed assets.  Money is in the DETAILS, not in bulked entries everyone!  Make sure you capture your 100% bonus depreciation for 2011 – it will go away soon.
  2.  Rev Proc 2007-16 Study – 3115 assets; allows taxpayers to change their method of accounting and claim the allowable depreciation (or amortization) amount they never claimed (i.e. bonus depreciation, etc.).
  3. Physical Fixed Asset Inventories – cost savings all across the board with Property Taxes, Insurance Premiums, Financial savings impact and more.  Have you ever done one of these before?
  4. Asset Appraisals – is it really worth TODAY what it once was?  Probably not.
  5. Automated Depreciation System – if you are still stuck in spreadsheet land for calculations, believe me when I say, YES you ARE missing additional expense and bonus that you are entitled to.  I see it every time I open someones spreadsheet!  Doesn’t matter the size of the organization or spreadsheet, there is ALWAYS calculation error, sometimes in the millions.

Which industries would benefit from these services / studies?  Just about all industries, well, maybe government and non-profit wouldn’t benefit from all five, but certainly from a couple.  Industries that would uncover a ton (always in the thousands – sometimes millions) from one or all five: hospitality, data centers, banks, manufacturing, retail, healthcare to name a few.

Now I know why I love waking up every day to go to work for the past 14 years (and growing)… because everything I (and my associates) do each and everyday help people and their businesses grow.  Who doesn’t like that?  Probably the same people who don’t like furry fuzzy kittens.

 

 

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.!

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