No financial process is immune. Leading companies automate anything they can—data entry, invoice posting, bank reconciliation, etc.
Yet less costly processes can escape notice. Preoccupied with weeks spent on bank reconciliation, businesses often overlook more pedestrian losses.
Asset management often falls through the cracks.
As of 2017, only 37.6% of businesses are using a dedicated fixed asset system, according to a poll by Bloomberg BNA. Most companies manage fixed assets using Excel or other spreadsheet tools. Further, nearly half of those surveyed said their accounting teams spend an average of four to five days a month on spreadsheet and database management for fixed assets.
As with any process, our first step is to identify inefficiencies. At which points could automation make a quantifiable difference in asset management?
I will suggest three: automated depreciation, asset linking, and asset tracking and reporting.
1. Automated depreciation
You should be able to automate both depreciation calculations and scheduled asset postings. The right solution will give you a choice: either select from a variety of built-in depreciation methods, or define your own. You should have the freedom to set distinct depreciation rules as needed; for instance, with one calculation for your official books and another for tax purposes. In this way, you can ensure compliance without constant manual intervention.
2. Asset linking
Suppose that you own a three-building campus. Now suppose that you make a journal entry to post a maintenance expense—an HVAC repair—for one of those buildings. With asset linking, you can tie that expense directly to the asset. If you need to repair one truck in a fleet, you can tie it to the entire fleet in any GL and PO activity.
Asset linking has further benefits. Suppose that you need to discover which specific trucks account for a fleet’s unusually-high repair costs. With asset linking, you can find the answer without retroactively linking truck to fleet.
This functionality seems intuitive. However, asset linking is unavailable in most stand-alone asset management modules.
3. Insight and Reporting
You should know the current state of your assets at all times, including information such as location, warranty expiration, condition, maintenance schedules, and to whom the item was assigned. This knowledge should enable you to improve the purchase planning process and avoid overspending.
But such insight requires both specific data and the BI tools to analyze it. Precious few stand-alone modules can provide both. And even fewer can ensure a complete and compliant audit trail.
To put it simply, asset management belongs in a larger context, and the best asset management functions exist in unified finance solutions like Xledger.
Xledger automates the market’s widest range of processes—asset management included. We equip you with a full range of automated depreciation methods. Unlike almost every other solution, Xledger enables you to link assets at the moment of entry. You can view, analyze, and report on multiple asset dimensions using our signature FlexiFields.
For more information about Asset Management in Xledger, visit our site or get in touch. We’d love to hear from you.