Archive for General News

Is data volume slowing down your fixed asset management?

One of the major challenges that can accompany fixed asset management is handling the volume of data.  The amount of information that corresponds with each fixed asset can continuously increase.  The asset file will expand with information about depreciation, maintenance performed or required, whether it has moved departments and so on.  Each time an activity associated with the asset occurs, more information is added to the asset record.  For this reason, organizations that have frequent relifes, disposals, or movement of assets, can quickly see their asset management get out of control if they do not have a set system in place for maintaining records. 

Keeping physical files for each asset can become a drain on space and resources, while a spreadsheet can quickly grow cumbersome and out of control.  One way to maintain an organized and contained record of all your asset management data is to use a fixed asset register, which is built to house the information in an organized and searchable feature.    Thus allowing your fixed asset information to be organized without becoming a time consuming activity.

Key features for government asset accounting software

For any government organization looking to implement fixed asset accounting software (or evaluating its current system), there are several key features that should be considered.  In order to have the most effective system, the software should:

• Possess stringent, technically advanced security features
• Aid in compliance with GASB 34 requirements
• Generate comprehensive audit trails with details of actions performed by all users
• Calculate and retain depreciation for one book or multiple books, for any period or range of periods
• Run ‘what-if’ scenarios for future capital government expenditure and asset disposals

In addition to the features above, government organizations should confirm that the software is able to cater to all standard government requirements and accommodate agency –specific conditions.

The core of any audit

At the core of any audit is the production of the report itself.  A list of all audit items must be produced.  It is helpful if this list allows the user to preview the details and suggested actions for each asset (a feature available in a specialist fixed asset tracking system). 

By checking the details before updating the asset register, the user can become aware of any discrepancies.  For example:  The printer that was scanned in the finance department may need to be moved back to the administration department, so the suggested transfer event would then be processed.

 Once data has been updated, you can produce additional reports, thereby providing a comprehensive account of all the changes that have been made to the register for any further analysis that you require.

The problem with using a GL or ERP for fixed asset management

Some organizations use a general ledger or enterprise resource planning systems for fixed asset management.  While it may work on a small scale, organizations often find that these systems are not robust enough to deal with all of the issues surrounding fixed asset management.  Problems that arise when using a GL or ERP include:

• The built-in basic asset register lacks the necessary functionality
• They do not meet group requirements
• There is no centralized system
• Lacks a cost effective fixed asset solution

Using a GL or ERP system requires that you must reconcile individual systems throughout your group, often leading to time consuming processes that open your organization to errors.  If your organization is still using a GL or ERP system for fixed assets, it may be time to consider switching to a specialist fixed asset management system.  

Find out more with our free Fixed Asset Management Evaluation Guide.

The 5 benefits of a CMMS

A computerized maintenance management system (CMMS) can help your organization increase productivity and actively manage and report on all associated planned and un-planned maintenance.  By allowing users to better manage the maintenance of their fixed assets, the user enjoys the following benefits:

1. Reduced maintenance costs
2. Increased operational life of equipment
3. Reduced downtime
4. Increased customer service levels
5. Reduced paperwork

A GASB Refresher

The goal of GASB, the Governmental Accounting Standards Board, is to improve governmental accounting and financial reporting standards in state and local entities, resulting in more useful data to better guide public issuers, auditors and users of financial reports.

GASB 34, 35 and 51 requires that fixed asset records and intangible assets be maintained by public entities in a complete, accurate and detailed manner and that governments report all assets, depreciation and amortization (including infrastructure assets) and any items classified as “historical treasures”

Typical infrastructure assets include: roads/bridges, sidewalks, tunnels, sewers, and lighting systems.

GASB applies to the following government organizations:

• General governments
• Public benefit corporations
• Public school districts
• Public colleges and universities
• Public hospitals and healthcare providers
• Public retirements systems
• Public utilities

Information to include on each asset record

A comprehensive asset register can greatly assist in your fixed asset management.  To have the most complete asset record for each of your fixed assets, consider including the following information:

• Unique identifier
• Analysis codes (e.g. category, cost center, department, company)
• Multiple lines for descriptions
• Purchase costs
• Purchase and capitalization dates
• Asset life  and depreciation rule
• Quantity
• Residual value
• Grant value
• Foreign currency amount

 By including this information, you will have comprehensive records for your fixed assets and it will help facilitate easy reporting and auditing.

Start 2012 off right – evaluate your current fixed asset management practices

As an organization grows, processes may be outgrown as well.   If your asset base has increased significantly in the past year or your organization has had changes in fiscal policy, you may want to review your asset management practices to ensure they are still practical and efficient for your workplace.

Your evaluation should include reviewing how assets are currently dealt with (are you using spreadsheets or do you have a specialist fixed asset system), is there a clear assignment of responsibility, and is your current system providing all the information and security you need. 

 If your organization does not have any specialist fixed asset system and/or specific practices in place, it may be time to consider implementing one and train employees to ensure your 2012 fixed asset records are correct.

 Need help?  Request our Fixed Asset Management Evaluation Guide here.

Asset reporting & forecasting’s affect on budgets

If you have a specialist fixed asset register, you can utilize existing asset information to run “what if” scenarios for future capital expenditure and asset disposals.  From this information the accounting and finance teams can build any number of different strategic models, allowing them to present the most cost-effective and tax-efficient capital budgets.

 With access to complete asset reporting and forecasting abilities, you can plan for any range of accounting periods, thereby facilitating the production of accurate budgets for the immediate future year and for longer periods.  Running different “what if” scenarios will help you see the effect of deprecation charges or events entered against both individual asset and categories of assets in the register.

Why linking parent/child assets is important

Establishing hierarchical relationships and dependencies can be essential to accurate fixed asset management.  An example of a parent/child relationship is the association between a computer and software license, where the computer is the ‘parent’ and the license assumes the role of ‘child’.  Since the software belongs on that computer it is important to link them together so any transfers or disposals that occur to the parent in a fixed asset management system, will inform you of the presence of a child assets, thereby allowing you to transfer or dispose of the child asset appropriately. 

By ensuring the relationship of the assets is kept intact, you are maintaining an accurate asset register and are less likely to experience ghost assets or zombie assets when performing a physical audit.