The day-to-day management of fixed assets is a critical business function, and one not easily understood outside the accounting and finance departments. The top-down nature of the decision to implement an Enterprise Resource Planning (ERP) system often does not specifically consider the unique requirements of fixed asset managers. Yet incomplete or inaccurate fixed asset management and reporting can negatively impact the bottom line with overpaid taxes and insurance, and potentially cause corporate compliance failures.
Two Approaches to Fixed Assets and ERPs
Essentially, there are two approaches to managing fixed assets in an ERP information environment. The first is to implement a native, add-on module from your ERP vendor. However, the main focus for many add-ons is the integration, not the features and functions required to plan for the most strategic use of assets and make positive impacts on the financial well-being of the company.
The second approach involves using a dedicated fixed asset management solution that is more fully featured and feeds important fixed asset depreciation data to your ERP system. Through data integration, both ERP add-on modules and dedicated fixed asset solutions can transfer fixed asset data among the fixed asset system, the General Ledger (GL), and other business functions, such as Accounts Payable (AP) and Purchasing.
The Benefit of Dedicated Fixed Asset Software
Fixed asset management is a tiny part of what ERP research and development teams typically work on. However, it is the exclusive focus of dedicated fixed asset systems such as Sage Fixed Assets. The Sage Fixed Assets development, compliance, quality assurance, and customer support teams all receive extensive training in the intricacies of depreciation. The team includes depreciation experts and CPAs who ensure that the solution stays on top of ever-changing tax laws and addresses the key concerns of fixed asset managers in the most timely, efficient, and reliable way. In short: as a result of its exclusive focus, fixed asset management software provides a broader feature set that makes the end-to-end fixed asset process significantly faster and easier for your fixed asset managers.
Another advantage of a dedicated solution like Sage Fixed Assets is that it is ERP-agnostic, meaning that it works alongside any accounting or ERP system, not just the handful of platforms a vendor-specific add-on module is built for. Because it is not a native, plug-and-play integration or purchased from an app marketplace, ERP partners rarely think to mention it. However, a Sage Fixed Assets expert can set up an easy data-sharing process that fits your workflow with your specific ERP or accounting solution, and the feature set of Sage Fixed Assets provides significantly more benefits than most “natively integrated” fixed asset solutions. (In the section below, we talk about how the setup works, so you can see if it sounds right for your workflow. )
Additionally, an ERP-agnostic integration prevents vendor lock-in, empowering you to choose any accounting solution or ERP over the decades your business manages its fixed assets. That flexibility allows you to maintain accurate, complete fixed asset data no matter which ERPs you migrate to over the years.
How an ERP-Agnostic Integration Works
Because Sage Fixed Assets is not tied to a single ERP or accounting solution, connecting it to your general ledger requires that someone build a routine that outputs a journal entry in whatever format your ERP accepts for upload. This takes slightly different thinking from a native, plug-and-play integration, where the first question is always “What is your ERP solution?” so they can see if an integration already exists.
Instead, for an ERP-agnostic integration, the first question is “What is the format you currently use today to upload a journal entry?” Every company has a format (you may have most recently used it for payroll), and your fixed asset expert can use that to determine the layout and create a custom script, Crystal Report, Excel file, or other format that will output your report in the precise layout you need, with no reformatting required from you.
Once the layout is set up, your fixed asset expert will create an automated routine in which you click once and get a complete, ready-to-upload journal entry that you can post to your ERP or accounting system using your normal upload process. Over the years at Paragon, some of our clients have used this process to pull journal entries from other applications into a ready-to-upload file, so they can collect all their external transactions with just a single click.
Additional Benefit: Timely Updates to Address Changing Tax Laws
Customers trust Sage Fixed Assets for total accuracy in their depreciation calculations. The availability of regular updates when tax laws change is a key difference between Sage Fixed Assets and add-on modules from ERP vendors. At Sage, a team of depreciation experts monitors all tax law changes and immediately goes to work incorporating them into the next release of Sage Fixed Assets.
An annual tax update incorporating all of the pertinent tax law changes for the next tax filing is released at the end of each year. Additionally, other releases of the software provide product enhancements and further tax law changes if new rules are announced midyear. These updates are included with a Sage Fixed Assets subscription or Business Care plan.
ERP vendors do not always schedule software releases based on tax law changes. That is because most software updates will impact multiple software modules and business units.
When Congress changes a tax law, your ERP vendor is unlikely to respond immediately, if ever. This leaves fixed asset managers in the unenviable position of having to manually determine how the changing tax laws impact their business. Without a timely release, you may have to pay consultants to update your fixed asset module to reflect current tax law or compliance regulations.
Questions to Ask When Considering Your Options
When selecting a fixed asset management solution, it’s important to find one that addresses the key duties of fixed asset managers throughout the lifecycle of fixed assets. Consider your company’s needs:
- What advanced fixed asset accounting features will you require?
- Are all of the tax forms that you will need to produce automated?
- Do you need to track and manage invoices and budget during work-in-progress projects before a new fixed asset is created?
- Will you take routine physical inventories of fixed assets?
- What types of reports and projections will management expect? Or the auditor?
- How many people will need to access the fixed asset system? Are they located in different buildings, cities or countries?
Complete Fixed Asset Lifecycle Management
Because of its exclusive focus on fixed assets, Sage Fixed Assets has the most complete feature sets available today. Perhaps the most defining feature of Sage Fixed Assets is its comprehensive management of the entire fixed asset lifecycle, from construction-in-progress projects and acquisition, to transfer and disposal.
Sage Fixed Assets is easy to implement, learn, and use. Every feature is designed to help fixed asset managers and their teams accomplish routine tasks in fewer steps and with more accuracy.
It is easier than ever to take advantage of all the benefits offered by Sage Fixed Assets while still fully utilizing your ERP system. For businesses facing the decision between implementing a dedicated fixed asset management system, such as Sage Fixed Assets, or adding an ERP module, read our blog Fixed Asset System vs ERP Fixed Asset Module At a Glance.
Want more information about whether a dedicated fixed asset solution is right for you?
Contact us today to talk to one of our fixed asset experts.
