5 key reasons to consider a specialist Fixed Asset System...
With increased pressure on finance departments to manage their asset accounting processes in compliance with the ever changing requirements of IFRS, AASB, GAAP, Australian/New Zealand Tax and SOX regulations, the continued use of spreadsheets could prove to be a risky strategy.
Whilst there can be advantages to using spreadsheets for controlling and managing a small number of fixed assets, most notably the cost effectiveness and speed of set-up and the ease of modification and flexibility of conducting simple calculations, where organisations have large asset registers and complex processes and associated depreciation calculations, the disadvantages far outweigh the benefits.
Read on to discover more about the pitfalls of spreadsheets and how a specialist fixed asset solution could not only make your life easier but more importantly improve the accountability of your asset base.
1. Inaccurate depreciation calculations
Too many spreadsheets contain errors, which is to be expected with information entered by hand. Whether it be the background asset data or the formula itself, there’s little doubt that depreciation calculations, when based on a spreadsheet are likely to be inaccurate, potentially affecting the balance sheet. Additionally, with more than one person managing and editing spreadsheet data, errors are even more likely. With a specialist solution, you can be 100% confident of the integrity of your data.
2. Lack of audit trail and overall security
A specialist fixed asset register will track and record every detail of every action made by any user, which is unachievable with spreadsheets. Security defined at an individual level ensures that budgetary, financial and other confidential information can be viewed only by those who need to see it and safely hidden from those who don’t.
3. Unable to meet Corporate Governance/Tax Compliance
The strict accounting requirements to comply with regulations including IFRS and AASB for improved financial management and increased detailed reporting dictates the need for higher standards of accountability and transparency. And relying on spreadsheets could achieve instable and poor results. A specialist solution will not only provide access to a comprehensive audit trail and flexible reporting functionality, but also enable finance professionals to accurately forecast annual depreciation, tax charges, low value pools and business use deductions within a single click for compliance with ATO and NZ Revenue requirements.
4. Inability to meet historical reporting and forecasting requirements
Composing reports from spreadsheets can be a complicated and daunting process, as they have to be analysed individually and often use complex macros, which is time-wasting and often prone to errors. Using a specialist asset management system which incorporates standard and customised reporting and forecasting will ensure an intuitive method of extracting and analysing data quickly and accurately.
5. Unable to conduct batch disposals and link ‘parent/child’ assets
The ability to establish a hierarchical relationship or key dependency through the linking of parent/child assets is crucial and a function which spreadsheets cannot fulfil. A typical example might be the association between PC and software licence, where the PC is the ‘parent’ and the licence is the ‘child’. The option to transfer or dispose of the child asset within a specialist solution will subsequently follow the transfer or disposal of the parent asset, keeping the relationship intact.
If you are using spreadsheets to control and manage your fixed assets and are having problems with business efficiency, contact RAM today. As a specialist provider of asset management software, we would be happy to provide you with more information or arrange a demonstration.