Fixed Asset Accounting Software

Overview

Fixed assets, as essential business tools, are important to safeguard and maintain, but many fixed asset managers are still using spreadsheets to track this critical information. Smart managers are beginning to look to accounting systems that are designed for fixed asset management, but there are dozens of such programs, which can make picking the right solution challenging. We’ve created this buyer’s guide to make that process a little bit simpler. Here’s what we’ll cover:

What is Fixed Asset Software?
What Type of Buyer Are You? The Fixed Asset Software Vendor Landscape

Market Trends You Should Understand
Benefits & Potential Issues

What is Fixed Asset Accounting Software?

Fixed asset accounting software tracks important asset characteristics such as location, check-in and check-out, due date for return, maintenance scheduling, audit history, cost, and depreciation. With the right software, a business can improve efficiency and financial strength by maintaining its existing fixed assets while avoiding unnecessary equipment purchases and upgrades. Software can also aid in minimizing taxes and insurance costs by accurately calculating tax and automatically checking for tax code and regulatory compliance. Using depreciation schedules to precisely calculate taxes with a frequently upgraded software program enables a company to maximize tax savings while automatically staying up-to-date with relevant changes to tax laws.

Fixed asset accounting software can integrate with the general ledger, allowing fixed asset information to easily be combined and compared with general accounting records. This promotes a seamless and consistent view of a company’s financial situation and the status of its fixed assets. Some software packages can even incorporate and track conversion of fixed asset value in other currencies. This automated feature clearly expands the geographic communication options of a company’s assets and potentially makes it easier to sell fixed assets overseas.

What Type of Buyer Are You?

Depending on your industry and needs, you may want to look for specific features or characteristics of a fixed asset accounting software package. For instance, a company using barcodes to catalog its fixed assets should look for the corresponding software method, whereas a company that prefers radio frequency identification (RFID) should find a solution with that feature included. A business using a certain type of tax software, such as ProSeries, might want to look for asset accounting software that can import data from that type of program.

When searching for fixed asset accounting software, pay attention to the following criteria:

• Does the software incorporate a specific type of inventory cataloguing (i.e., barcodes, RFID, etc.)?
• Does it use the right methods to calculate depreciation?
• Is it tailored to your company size?
• Can it integrate with a general ledger software program or other programs preferred by the company (ProSeries tax software, etc.)?
• Can the software adequately track sales of fixed assets and provide information about the gains or losses from the sale?
• Can the software track maintenance schedules and issue reminders when maintenance is due?
• Will the company want to take advantage of features which allow collaboration and interaction between different departments in managing fixed assets?

You’ll also want to consider whether you want a standalone system to be installed on-premise, or if you’d prefer a web-based system with lower up-front costs.

The Fixed Asset Software Vendor Landscape

There a number of different products providing fixed asset management in their software, but below are some of the major players, by industry type:

Market Trends You Should Understand

There are a few trends affecting the fixed asset software market:

• Software as a service (SaaS). In most industries, accounting included, more software is being developed as web-based platforms with a monthly fee for service. This eliminates the need for an expensive IT infrastructure and shifts the costs to being a long-term operational expense, rather than a major up-front capital investment.
• Industry specialization. Because manufacturers have different needs than retailers or real estate investors, most vendors are beginning to tailor their software to specific industries. This forms a highly specific and usable solution with all the features you need and none of the ones you don’t.

Benefits & Potential Issues

Fixed asset management software provides the following concrete benefits:

• Simplified processes. Fixed asset software has built in audit trail capabilities, allows for document attachment, enables quick changing of information for asset movement or processing, and usually integrates directly with other accounting systems.
• Accurate depreciation. Manually created spreadsheets are highly error prone and stagnant. Fixed asset software solutions will update automatically when laws change, they minimize human data entry, and they are guaranteed to provide accurate calculations.
• Tax compliance. One of the main uses of fixed asset management software is tax compliance, ensuring not only that the company is in full compliance with all state, federal, and local regulations but also that its taking full advantage of all potential tax breaks.

Any time you purchase new software, implementation is a critical consideration. Ensure you have an adequate training program and that you involve all potential users involved in the selection process, so they look forward to using the new software, rather than having it be forced on them by their superiors.

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