But our ERP has a fixed assets module...
Why should we use a third party fixed asset software to manage our fixed asset depreciation instead of our accounting system or ERP?Given a lot of such systems do have a native fixed asset module, it’s a fair question to ask and this article addresses some of the issues to consider. Before we get into the details, it’s worth outlining how a third party depreciation system is best set up. With the increasing availability of APIs as more and more businesses move to cloud-based systems, it is easy to transfer data automatically so use of different systems doesn’t cause the manual effort it once did. At AssetAccountant™, we integrate with a growing number of accounting systems and ERPs where we are able to automatically extract “draft assets” from the underlying GL or AP system that allows users to set their tax and accounts depreciation. Once this is done, AssetAccountant™ posts the journals back to the accounting system and/or reporting data into tax compliance systems so even those steps are automated.
AssetAccountant™ – saving you from spreadsheets since 2019
So, what are the advantages of using a dedicated system to manage your depreciation?
There are a wide range of scenarios that we see at AssetAccountant™, and we’ve given some examples of these further down below.
For our users who are faced with these requirements, the benefits that they get from using AssetAccountant™ include:
- No requirement to work on custom development within the core accounting system. Some larger accounting systems and ERPs are capable of custom development to meet user specific requirements. However, this work is often time consuming and requires a specific skill set which means it can be expensive. Further, custom development can cause issues with later updates and upgrades where these may not be compatible with the custom work that has been done.
- Avoiding ongoing maintenance of the accounting system. Even in the cases where an accounting system has been perfectly configured, requirements frequently change – this could be caused by a new business process, acquisition or updated tax rulings. In these scenarios, updating the custom configuration can add further ongoing material cost.Third party dedicated software can materially reduce this cost by providing coverage for all these needs as standard functionality.
- No need to resort to spreadsheets. In many cases, either when the accounting system cannot be customised or you encounter a scenario it can’t handle, there is often no choice but to adopt some form of spreadsheet use as a workaround to one or more limitations. Time after time, we see this happening and once a spreadsheet has been created for this purpose, it is very hard to then move back into the accounting system without a large scale project to undertake.
Why our clients love AssetAccountant™
Fantastic product - has literally saved me hours of work.
Ever wanted the big company fixed asset system without all the clunkiness and overthinking on the part of the software developers (I'm looking at you Thomson Reuters...)? Well then you need AssetAccountant. It provides just the right mix of complex depreciation calculations and beautiful user interface. It's a system designed by accountants and executed perfectly by developers. The integration is seamless with Xero (you can sign into AA with Xero credentials which is awesome if you are already running Xero on your browser) and journaling synchs are very flexible between the two applications. Then there is the price. I challenge you to find a more robust fixed asset system at these price points. Well done AssetAccountant.
You get me.
I now have my big boy jocks back on for fixed asset management....and they fit!
When is it appropriate to consider a third party depreciation management system?
- A requirement for multiple sets of books for accounts and tax
- Large volumes of data to manage meaning that functionality such as the following saves a vast amount of time:
- Unlimited classifications such as cost centres, locations etc
- Custom fields per asset
- Audit trail reports
- Efficient performance at scale
- Some specific treatments that occur frequently:
- Different cost bases and acquisition dates by book
- Partial disposals
- Bulk actions (disposals, revaluations, etc)
- Work in progress / Assets under construction
- Management of complex accounting matters such as:
- Revaluations and impairments
- Enablement of full tax calculations:
- Pools such as the Low Value Pool, Small Business Pool or Software Pool
- Second element of cost
- Private/taxable use
- Tax rulings maintained and updated by AssetAccountant™ including the real-time ATO effective life lookup tool, backing business investment & luxury vehicle cap limits
- Leases and hire purchase calculations are also required