Controlling Fixed Asset Data
The Controller for a SMB wanted a better way to organize fixed asset data, to provide timely reports to management and to more effectively interact with the outside accountants. At the time, the data was maintained in several spreadsheets and was getting harder to manage with each passing year.
While spreadsheets are simple and convenient when starting, they lack the structure needed to properly maintain fixed asset data and produce the necessary calculations and reports for internal management and outside accountants. Spreadsheets are also error-prone. Fixed asset data management and reporting are much better suited for a database program.
The Controller’s goal was to better manage the company’s fixed asset data and improve the overall fixed asset accounting process. She decided to use MoneySoft Fixed Asset Pro™ to create an organized and on-demand repository of fixed asset data.
SMB Controllers, Fixed Asset Managers and Accountants rely on MoneySoft Fixed Asset Pro or similar software to improve their fixed asset accounting and reporting. In order to take full advantage of a fixed asset software system, the data that it holds needs to be:
- Complete: contain all of the company’s capitalized assets.
- Accurate: include the correct information and depreciation calculations for each asset.
- Up-to-Date: to maintain information on a regular basis as fixed assets are added and disposed.
A set of written Fixed Asset Accounting Policies and Procedures will give you greater control over the company’s fixed assets and will make it easier to maintain a complete, accurate and up-to-date data set of your company’s assets. With this level of organization, the information requests of management, outside accountants and auditors can be fulfilled promptly and with fewer hassles.
The Fixed Asset Accounting Policies and Procedures should be scaled to the size of the organization. The greater the number of people who are involved in the process of purchasing, disposing, maintaining, managing and accounting for fixed assets, the greater the need for clearly written detailed policies and procedures.
Even the smallest business can benefit from Fixed Asset Accounting Policies and Procedures that address such items as:
- Capitalization Policy including the definition of a fixed asset and the threshold value to determine whether to capitalized or expense an asset.
- Definitions of the different classes or types of fixed assets.
- Depreciation Policy including guidelines for selecting a depreciation method, useful life, etc. for specific assets classes or types of fixed assets.
- Accounting codes for classifying fixed asset purchases on invoices and purchase requests.
- Policy regarding the valuation of purchased fixed assets.
- Policy for authorizing fixed asset purchases and procedures for purchasing and disposing of fixed assets.
- Schedule and method for performing a physical inventory of fixed assets (at least once a year).
- Background documentation required for each asset.
Preparing and implementing Fixed Asset Accounting Policy and Procedures in concert with a high-quality fixed asset software (such as Fixed Asset Pro) will go a long way towards achieving the goal of assembling fixed asset data that is organized, complete, correct and available on a timely basis. The benefits include greater control over fixed asset data and the ability to interact with outside accountants and auditors.
The next article will focus in greater detail on the issues to be addresses in a SMB Fixed Asset Accounting Policy and Procedures manual.
For more information about the Fixed Asset Pro™ and to schedule a demo, please contact Matthew Shipley at 800-966-7797.
By Matthew Shipley and Robert Machiz
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