Software Selection for Fixed Asset Accounting
Properly accounting for Fixed Assets is not a trivial exercise, with a range of reporting, inventory, and valuation issues that need to be addressed to meet both accounting standards and government tax regulations. For capital-intensive industries, the numbers can be in the billions of dollars, with a direct impact on financial statements and with decisions that can impact the company’s stock price. While it’s true that getting a payroll or an expense reimbursement wrong can be embarrassing for Shared Services, the impact of mistakes or errors in Fixed Assets can have significantly more serious consequences.
With virtually all companies over a few billion in annual revenue making the transition from home-grown to purchased ERP software, complexities often remain, with multiple ERP solutions, multiple instances of a solution, and/or multiple versions of the same software as part of the Fixed Asset system architecture. Knowing what other solutions are available from third parties to enhance or replace ERP Fixed Asset functionality is an important exercise for any company, regardless of size, that is experiencing difficulty or issues with their current software for Fixed Asset accounting.
iPollingTM Results Review
Recently, Peeriosity’s iPollingTM was used by a Senior Finance Director at a member company to understand the tools member companies are using for Fixed Asset maintenance, reporting, and inventory. Using this approach, the poll author was able to quickly gain insights into her issue, which she described as follows:
For years, we have used a homegrown application to interface to our ERP for Fixed Assets maintenance, reporting, and inventory since this functionality was not robust in our ERPs. We are faced with either upgrading the application or procuring/using a 3rd party product. We wanted to understand what options other companies may be using for these processes, whether it be functionality within an ERP or other 3rd party package.
The first question in the poll asked about the tool that is being used. The overwhelming majority, at 88% are using their ERP as the primary tool, with 8% using an in-house developed tool, and 4% using Excel spreadsheets with uploads made to their ERP. While the results are compelling when you know the answer, to software-related questions until you see the data the answer is less obvious since there are many software solutions available for Fixed Assets that are advertised and marketed to mid-sized companies. ERP providers, in contrast, are less likely to separately market or advertise their solutions for Fixed Asset accounting.
Regarding overall satisfaction levels for the Fixed Asset accounting solutions used, 76% report that they are either satisfied or very satisfied, with the remaining 24% either indifferent or unsatisfied. Here are the details:
The following are some of the valuable comments added by members:
- We are starting the process of implementing 3rd-party software due to the limitations of the ERP’s fixed asset capabilities.
- SAP is used for maintenance and inventory. DOWNLOADS are heavily used to REPORT results. Asset physicals are done offline with downloaded reports. Reports are available within SAP for monthly results (act, bud, aging) but not all in one report.
- We use SAP as our ERP and the Asset Management module is a great tool. We also use the Project Systems module to manage the project spend and it ultimately interfaces with the Asset module to create the assets.
- We use Oracle for the process from purchase requisition through to disposition. Compared to other systems I have used I much prefer this integrated system. The reporting is not ideal, and we export to Excel and customize everything.
- We use an Excel workbook as our Asset Maintenance Form and route it for approvals using Nintex. We use SAP to house our asset master data. Once we receive the approved Excel workbook, we perform the asset maintenance in SAP.
- For records maintenance in support of accounting and external reporting, the ERP is used. We do not use a software tool to capture parts, labor, et al., for repairs and maintenance operations aimed at the upkeep of the physical assets. When fixed assets are inventoried annually, the ERP asset listing is downloaded to a spreadsheet that is subsequently formatted to facilitate the physical count activities.
- I have seen the use of both the primary ERP and bolt-on/3rd-party software for the management of fixed assets. At a previous company, we used a system called Sage FAS in conjunction with JDE as our ERP — this system worked well for the business.
- We use our ERP system SAP.
Deciding on how to best meet your company’s needs to support Fixed Assets, and specifically, as it relates to the Fixed Asset maintenance, reporting, and inventory processes, can be a complicated issue. With various technology solutions often leap-frogging each other every few years, how do make sure that the approach you are currently following is still optimal? Fortunately, with many companies having deep experience in this area, Peeriosity member companies can easily learn about and, more importantly, understand the reasons peer companies are making various selections. Understanding the paths taken by trusted peers can be invaluable as companies determine their own optimal paths to follow.
What is the primary tool your company uses for Fixed Asset maintenance, reporting, and inventory? For the tool you’ve selected, what is your overall satisfaction level?
Who are your peers and how are you collaborating with them?
“iPollingTM” is available exclusively to Peeriosity member company employees, with consultants or vendors prohibited from participating or accessing content. Members have full visibility of all respondents and their comments. Using Peeriosity’s integrated email system, Peer MailTM, members can easily communicate at any time with others who participated in iPolling.
Peeriosity members are invited to log into www.peeriosity.com to join the discussion and connect with Peers. Membership is for practitioners only, with no consultants or vendors permitted. To learn more about Peeriosity, click here.