Fixed Asset Management is often looked at as a necessary function in operating your business, but often overlooked as an area where a company can leverage fixed asset software to directly improve its bottom line. By properly managing the fixed assets your organization has invested in, you can be assured of what assets you have and where they are located, realize the maximum tax benefits available, ensure the assets are being utilized properly, and easily and accurately identify their value to the organization.
Many small to mid-size businesses, as well as some larger organizations, are utilizing spreadsheets as the tool of choice for managing their assets. This obviously has many limitations, such as having to manually enter all the asset details for each asset book, keep up to date with the numerous IRS and GAAP rules and regulations, live with reporting limitations, manually post the calculated depreciation into your accounting system, and if you deal with construction-in-progress tracking, tying numerous transactions to the assets being constructed. By leveraging fixed asset software to handle the creation of your assets, you can take advantage of functionality that will streamline this process and save your organization time, such as built-in IRS and GAAP rules and regulations, templates for creating repetitive types of assets, built-in report writing capabilities, and integration with accounting systems.
In addition to streamlining the process, many organizations are looking for ways to cut costs. An example of this is how fixed asset management software enables companies to bring the management of fixed assets in-house. Another example of cost savings is how software can assist in identifying ghost assets, which are assets that no longer exist, but the costs are still on the books. At first brush this may not sound like an important benefit, however, having ghost assets on the books leads to overpayments in taxes and even insurance. Independent studies have shown that ghost assets can make upwards of 15-30% of the assets on a company’s books. Obviously, companies can achieve real cost savings by writing off these ghost assets.
As discussed, a company’s profitability is impacted by its ability to manage its fixed assets. By leveraging fixed asset management software to assist you with this process, your organization can realize tangible savings and improve its bottom line.
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