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

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.

 

 

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.

Stolen Fixed Assets

Physical Inventory = theft deterrent.

Common Question – How can stop getting our assets stolen, or even better, track our assets so we know if they are stolen?  The answer is always the same, and the answer is easy… CONDUCT A PHYSICAL ASSET INVENTORY of your fixed assets!  For cryin’ out loud.

Recently (March 2010) Paragon Systems conducted a physical inventory of all fixed assets at a large hotel because the hotel client wanted to account for all assets because they were afraid people might steal them when they moved, demolished or had to close down.  Smart.  Just a week after Paragon’s team left, this hotel now (finally) has a complete listing of EVERYTHING in their hotel: furniture, fixtures, computer equipment, office equipment, ART (see my other entry about hotels & resorts and their art), gym, pool area, kitchen equipment, and much more.

Most companies don’t take the time and effort in implementing a full-blown physical inventory of their fixed assets (capitalized or expensed), but I tell ya what… do it once and then you can maintain it going forward.  Like anything else a company implements: CRM systems, Accounting systems, etc.  The heavy lifting is getting it up and running with extremely great (or we strive to make it) work flow.  After it’s implemented, moving forward is a breeze.

My final note: make sure you are keeping all your assets out of the hands of someone else!

Hotels & Resorts: Fixed Asset Perspective

Personal story from Angie Bolton-Lyons, Senior Fixed Asset Consultant and Sage FAS Guru!

I was on vacation back in February at a beautiful resort – in a beautiful place. Most people would notice the gorgeous views (which I did) and all the elaborate decor. I however, being a fixed asset consultant for many years and knowing about the costs of movable assets, I noticed other things. Beautiful, expensive things. Lots of fixed assets!  I wondered to myself, has this resort ever performed a physical inventory of all these fixed assets? 

As I walked around this elaborate resort, I also noticed that a lot of renovations just finished and even more construction is about to begin.  Then I wondered… Did they take all those assets they just ripped out through a retirement study?  Or perhaps they did a thorough Cost Segregation Study after the original build out.  If that’s the case, then, they probably accounted for all those assets they tore down and disposed of them properly.  Thus showing on their balance sheet, property taxes, insurance, etc.  Hummm?

Off to my room to check in and check this place out more.  I continued to walk around and notice so many beautiful things… I wonder how much they paid for all this landscaping and I asked myself, “self, do they know that a lot of landscaping can actually qualify as personal property?”  After contemplating for a bit more, I noticed it was now Happy Hour! 

Since I love $5 Mai Ties and I’m not shy, I befriended my bartender.  After a ton of mindless chit chat (which I thoroughly enjoyed – mind you, I’m on vacation), eventually I asked him if their were any upcoming renovations happening soon.  He said, “well Angie in fact there is… see that fancy sushi restaurant over there?  This is the last week they are serving.  After it’s torn completely down, they are getting a complete million dollar re-build/renovation.  You better go eat there while the gettin is good.”  So you know what I thought?  Exactly (because obviously, I’m a nerd)… who is the Controller or CFO around here and can I please double-check with them to see if they are properly recording their disposal’s and rebuilding the most appropriate way to capture all the tax benefits they can?  How about a tax engineered cost segregation service?  Yikes!

I know my mind should be on my wonderful vacation, especially since it has been eight years since I’ve taken one.  However, I often think about all the hotels and other hospitality prospects and clients out there that have NEVER done a physical asset inventory, let alone a proper Cost Segregation and Valuation study.  They could be overpaying property taxes, not gaining all the tax benefits they have available to them and… could be under insured!  Three days after we left, a Tsunami hit.  Hope they were covered!

Always working and thinking about fixed assets – Angie Bolton-Lyons

Question to the Masses – Physical Asset Inventories

Think of this more like a poll question from the writer; instead of the other way around.  Honestly, I’m just very curious.

  • How often do you/have you performed a physical asset inventory within your organization? 
  • If you have, do you outsource or do it internally?

Please feel free to comment however necessary and I’ll post accordingly.

First 5 people to comment (ahem… a real answer comment), I will email you so I can send you a $10 gift certificate to Starbucks.

Thanks for curing my curiosity!

Press Release: Chicago, IL – October 13, 2009

Paragon to Host Sage FAS Fixed Asset Management
Sessions at Sage Summit

Paragon consultants will participate at Sage Summit helping Sage Customers through breakout sessions, conveying best practices for physical asset inventories, managing fixed assets, and using Sage FAS software.
  
Paragon systems, a provider of Sage FAS Fixed Asset Management Software and physical asset inventory services, has announced their participation in the 2009 Sage summit Customer Conference.  Paragon will host a booth on the trade show floor where their staff of fixed asset management experts will answer questions about Sage FAS, conduct product demonstration, discuss physical asset inventory strategies, and introduce value-added services for Sage FAS customers. [READ MORE]
 
Fun Fact: Angie is quoted in this Press Release.  Enjoy!!!

 

 

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