Fixed asset software: More than just depreciation

by Wayne Schulz

If your firm still computes depreciation manually, and cannot justify the extra software costs just to get out a listing of fixed assets with the depreciation computed correctly, you may want to look again at fixed asset software.

Today’s fixed asset programs do more than properly compute depreciation. Sure, the computation is the most significant feature in the program - but don’t overlook these added functions:● Standardization. The backbone of a quality work program in any CPA firm is standardization. The use of a high-quality fixed asset program virtually guarantees that your firm’s fixed asset work papers will adhere to a central standard - mathematically correct in calculation and presented in proper groupings - be it for tax, book or another method of depreciation.

The simple use of a system thoroughly designed for depreciation, versus writing your own inside a spreadsheet program, is a tremendous timesaver.

With homegrown spreadsheets, the ability to modify the formulas is both the greatest feature and the greatest liability. One flawed formula within a spreadsheet can cost hours of (expensive) manual labor. Now multiply that by tens or hundreds of clients and the cost can grow exponentially. Here is where you’ll begin to see the true cost savings of adopting more formalized fixed asset software.

● Accountability and tracking of assets. Maintaining an accurate listing of assets to support the year-end financials is not only a required audit procedure, but answers to management’s newest rules for accountability and attesting to the validity of the resulting financial statements.

The best software packages reviewed here allow for virtually unlimited locations and categories to be created. From within the software you’ll be able to print accountability reports to be distributed within your company, so that staff can check on the location and condition of your most valuable fixed assets. If required, you can often retain information on warranties and serial numbers right within the fixed asset software itself.

● Summarized tax information. When assets are sold, it is important that an accurate cost basis be available. Fixed asset software will always provide you with not only the current year’s depreciation - as well as all prior accumulations - but it should allow you to tie out the prior-year figures as well.

Should there be a question about an asset having been over- or under-depreciated, you’ll want the ability to instantly click a button to view the amount of the over- or under-depreciation, thereby insuring the most accurate financial information possible.

● Fast changes to asset computation methods. Software really shines when “what if” and retroactive comparisons need to be made. Assume for a moment that you decide that an asset was being incorrectly depreciated for the last several years. With the top-notch fixed asset systems, the scope of the potential adjustment is easily determined as the depreciation method is changed.

In many instances, your entire adjusting entry is made for you with one click of the mouse. Entire categories of assets may often be changed from one basis of depreciation to another, with a resulting report showing the effects as your backup source for general ledger adjustments.

● Multiple bases of depreciation. Simultaneously handling different bases and methods of depreciation is all readily accomplished with lighting-like speed and efficiency. Most software packages have half a dozen (or more) available bases of depreciation - covering computations for book, tax, AMT, state, ACE and custom methods/books.

● Online help for tricky categorization of assets. Fixed asset software not only helps with the standardization of data entry, but almost always contains wizards or context-sensitive online help.

This feature is crucial because in practice the person entering fixed assets to the system may be a more junior staff member. Whenever there are questions about the appropriate method of depreciation, having online lookup help or wizards greatly aids in not only the standardization but also the accuracy of your data entry. Reducing errors at the point of data entry will cut overall time as your engagements progress. An error caught early in the process of depreciation can save hours of work paper processing as the engagement is completed.

● Property tax reporting. Often the property tax reporting of assets is an afterthought. It generally occurs once a year, and is a backburner item until the deadline approaches. The fixed asset programs all allow for you to categorize each asset in the system so that it may be easily reported upon when the tax filing deadline approaches.

● Custom report writing. After getting the information into the software, getting it out is the next most important function. You’ll want to be sure that there are not only a healthy number of canned reports, but that you have the option of using a customized report writer to generate your own printed output when your needs deviate from the standard set of reports included with the software.

The most often used reporting tool is either Crystal Reports or an internally generated report writer. Look for two things in the report writer. First, be certain the ease of use is top-notch. With the advent of Windows programming standards, the clunky DOS report writers of yesteryear are (luckily) a memory for most of us. Second, be certain that your report writer can export to a common file format like CSV (comma-separated values), ASCII (text) or Excel. This gives you the added flexibility of further manipulating any reports or possibly cutting and pasting them into the resulting financial statements.

● Integration to tax and accounting. Firms that prepare a large number of more complex tax returns can often benefit from linking fixed asset schedules and amounts directly from their software to either their tax or accounting package. Obviously, if you have a more complex situation involving multiple departments or locations, then you’ll have more need for a solid direct link.

Most fixed asset programs allow for bridging between their system and the popular accounting and tax products. The ones with the tightest integration will be those that also offer a companion tax or accounting product from within the same software family.

ProSystem fx Fixed Assets
CCH

Strong integration to the popular ProSystem fx tax preparation software and the capacity to handle unlimited numbers of fixed assets are just two of the many attractive features of ProSystem fx Fixed Assets. The entire program is user-friendly and can be quickly mastered by the most junior of staff in a couple of hours.

The system will track and manage up to 10 different pre-defined methods of depreciation - including lesser-used computations such as units of production and Indian reservation. Up to eight different depreciation books can be maintained, including the standard federal, AMT, state, ACE and financial books, plus three user-defined categories.

Each of the asset books may be viewed directly on one screen, which makes maneuvering and data entry fast and less prone to error. The online help is plentiful and serves as a great aid to those newer staff handed the coveted task of entering a client’s complete fixed assets or generating the annual asset update.

Standard reports included with the software are the Depreciation Expense reports, as well as Asset Notes, Detailed Projections, and a Form 4562 worksheet that is handy for inclusion in the workpapers as supporting documentation for the annual depreciation and accumulated depreciation computations.

Ready-to-file tax Forms 4562 and 4797 can be printed directly from within the software, or the fixed asset amounts can be effortlessly transferred to ProSystem fx for tax return inclusion and printing directly from the software.

ProSystem fx Fixed Assets is a powerful and flexible fixed asset reporting package. It has been continuously updated and allows for ample customization so that its use can fit almost any size firm or organization. The unlimited capacity, coupled with the links to the popular ProSystem fx tax processing system, make it a natural addition to most firm’s software catalog.

FAS First Step
Best Software

As a long-time player in the fixed asset market, FAS software has emerged as the popular choice of over 100,000 financial managers. The software comes in several different versions, from entry level (up to 1,000 assets) all the way to larger corporations with many thousands of assets. There are versions of FAS specifically tailored to the needs of governments and nonprofits.

There is enough real estate on one data entry screen for up to seven different depreciation books. These include the financial, ACE, federal tax, state tax, AMT and two user-defined books. When you need to see more detailed information involving just one of the asset books, you can easily drill down and view acquisition, cost and notes, as well as any disposal notes that might exist for that particular record.

Custom reports can be prepared through a separate FAS Report Writer. There are over 20 different canned reports included with the software - so creation of your own specific reporting format may not be required, though it is essential that the capability be there should you require a specialized report that the program developer hasn’t thought of.

Setup of new assets is assisted both by a robust online help system and a handy set of new asset wizards. These wizards are available to give assistance on the proper depreciation method of life of a particular asset - further streamlining data entry and ensuring accurate computations are kept for each and every asset online.

FAS First Step is a good choice for the smaller company looking for a fixed asset program to initially manage up to 1,000 assets. As your organization grows, you’ll be able to upgrade automatically to their more extensive versions without any re-keying of data or tedious import or export. This is a solid system with a long reputation and an extensive list of users.

BNA Desktop Pro
BNA Software

BNA has one of the most robust tax offerings available. Its product line includes not only an extensive list of tax and compliance publications, but also several very popular tax planning products. Their Desktop Pro fixed asset software allows for an amazing number of computation options, making it almost certainly the product of choice for the most demanding asset accounting situations.

New company setup can be greatly standardized (a huge plus for any CPA firm) by the use of asset templates. Adding in a new asset is as simple as picking the template that most closely matches the asset type and supplying the underlying information on purchase price, date, etc. The program does the rest of the setup for you, saving keystrokes and significantly reducing the possibility of making computational errors.

There can be up to 99 different books of depreciation, including the common financial, state, federal, ACE and AMT tracking. BNA’s Open Timeline allows for making adjustments in any time period and having all calculations correctly (and quickly) updated for the asset - both for the current and prior periods of computation.

There are over 35 different pre-written reports that are included, as well as six different fileable tax forms. If those reports aren’t to your liking, create your own custom reports through a link to the industry-standard Crystal Report Writer.

If you are already using a fixed asset program and looking to make a change to a new one, you’ll probably be happy to know that Desktop Pro includes the ability to import data from most popular fixed asset programs - including those from the American Institute of CPAs, CSI, FAS and CLR.

There is an entry-level version of Desktop Pro available for those companies without the powerful needs of the full version. This is a powerful fixed asset system that your organization can either grow into or make immediate use of. The features and functionality are powerful enough for companies of all sizes.

Depreciation Solution
Creative Solutions Inc.

Creative Solutions, a Thomson business, has worked hard to build its integrated suite of products geared toward the CPA marketplace. It holds annual user conferences and readily solicits and implements suggestions from the many users of its software as it strives to constantly improve them. Depreciation Solution has evolved nicely from its DOS days into a graceful and graphical product that fits nicely into the suite of CPA-specific products offered by Creative Solutions.

The interface for Depreciation Solution is especially well thought out. The screen is uncluttered, yet presents all the most important information in front of the user. There is ample use of lookup screens and pick lists. The online help is very good throughout and can be accessed from almost any data entry field. Setting up brand-new assets is greatly aided by the nice use of wizards, which walk the user though selecting the appropriate life and depreciation method.

Computation of depreciation can happen on almost any basis you define. The system will allow you to set up annual, monthly or quarterly calculations of depreciation. Where required, you can create your own custom formulas for the system to follow as it depreciates assets.

There are numerous built-in reports available, as well as a custom report writer. In many instances you can tailor one of the canned reports to meet your needs just by selecting a different sorting or display option during report printing.

For larger companies with more extensive needs there is an inventory module, which can aid the tracking of new acquisitions along with all of the resulting warranty and location information. When end-of-year inventory come along, all information is automatically transferred back to Depreciation Solution for year-end depreciation computation.

Depreciation Solution is a solid choice for firms and organizations of any size. The program is very user-friendly and the liberal use of wizards and templates makes the tedious task of data entry go that much faster.

Fixed Asset Relief
AccountantsWorld

Fixed Asset Relief packs a lot of power into an affordable software package. The system has the capability to track unlimited numbers of assets. Up to seven different books may be maintained and reported upon.

The data entry screens are clear and uncluttered. Shortcuts to commonly used phrases may be established through the use of speed pads.

You may enter transactions book by book (single-screen entry) or change so that multiple books are present on the same screen to decrease the amount of time it takes for you to perform data entry. Numerous customized fields may be added to your books so that you can slightly tailor each setup to match the company requirements. This is a nice feature for situations where more than a few additional tidbits of information need to be tracked.

Custom reporting can be accomplished through the included report writer. There are 15 standard asset reports with the capability to create (and save) as many customized reports as your situation demands. For on-screen lookups there is a highly customizable asset manager, which allows you to tailor asset lookup screens to show just the specific fields that you need to see.

Data may be imported from the earlier DOS versions of Fixed Asset Relief. There is also an ability to export to the Accountants Relief program for generating journal entries, or you can export to Excel and manipulate the data yourself.

Fixed Asset Relief is a simple and easy-to-use product that packs enough power for almost any size company. The shortcuts to data entry will be handy for streamlining setup and maintaining existing assets. Where additional reporting is required, the custom report writer offers a simple GUI interface through which to make almost any report.

Fixed Asset Pro
MoneySoft

Fixed Asset Pro is offered by MoneySoft, which also has a line of software geared toward the corporate valuation market. This low-cost package stands out for an uncluttered screen design and offering just enough computing options to be helpful without overdoing it with lots of bells and whistles. This solution is ideally suited for those with less complex and demanding fixed asset requirements.

The software supports an unlimited number of companies with up to six sets of depreciation books each. The data entry screens are intuitively laid out, and you may select from either a book-by-book data entry layout (one book per screen) or multiple books all laid out for simultaneous viewing. Swapping between these choices is a snap, as they make use of a tabbed interface that is clearly marked to show which view you are selecting.

Pick sheets are used throughout to speed the browsing and selection of different assets for viewing. Assets can be browsed by their number or their location, description, date acquired or any of several other common fields. Once selected, there are over 10 different reports. There is an included custom report writer, so you may fashion your own version of any report required.

Depreciation can be calculated on any of 38 different bases. The system supports half, mid-quarter and mid-month MACRS conventions. Projections of future depreciation amounts can be printed at any time from within the standard reporting menu.

If simplicity and ease of use are key to your fixed asset software selection, then MoneySoft deserves a look. The screens are uncluttered and the program is simple enough to be mastered in one sitting.

WorthIt Fixed Assets
MRS Co. Ltd

WorthIt Fixed Assets offers depreciation and fixed asset management, as well as providing for capital budgeting and planning. The optional report gallery and image gallery allow the software to also produce customized fixed asset reports, as well as hold asset images (pictures, documents, warranties, etc).

The screen layout is clean, with room for four different books. Each book is displayed on a separate screen. Moving between books is accomplished by clicking a button at the bottom of the screen. Ample use of pulldown fields is made to enhance the speed of data entry.

Unique to the WorthIt system is the management of self-constructed assets. The system allows for tracking all costs that are being added to an asset that is built by the company. Through lookup screens you can view transactions and see how the final asset value has been arrived at.

In addition to construction of the assets, you may also track service history. Here you can begin to get a better picture of your total ownership cost. Throughout these screens, ample use of lookups and asset classifications is made, so that you can get a clear picture of your total asset cost.

WorthIt Fixed Assets is a system that should be considered especially closely by companies heavily involved in self-constructed assets. Its ability to track repairs as well as maintain capital budgets makes it a good management tool for organizations looking to get a better handle on their asset costs - including not only the initial purchase price but all ongoing labor and repair costs as well.

Wayne Schulz, CPA, is a Glastonbury, Conn.-based technology consultant and reseller of Best Software products.