take control of your fixed assets process
DESCRIPTION
Take Control of Your Fixed Assets ProcessTRANSCRIPT
Start Time: 2:00pm EST
Welcome!
Webinar Details
• Presentation is roughly 1 hour
• All phone lines are muted
• If anyone has any questions during this webinar – please type them in your Questions Box located at the bottom of your webinar panel
Today’s Presenters
Grant GriebelFixed Assets Solutions EngineerSage
Howard Finestone Sage 100 ERP ‐ Practice DirectorNet@Work
Net@Work Overview – Solutions & Services
Depreciationdoesn’t have to be as complicated as you think
Depreciation: Eliminating the risks of spreadsheets
Depreciation doesn’t have to be as complicated as you think
Why shouldn’t I be using spreadsheets to manage my fixed assets?
What are the risks?
What alternatives are available to me?
Depreciation: Eliminating the risks of spreadsheets
Depreciation doesn’t have to be as complicated as you think
Agenda:
• Spreadsheet dangers
• Using Sage Fixed Assets Depreciation
• Managing the entire Fixed Asset Process
What do you meanspreadsheet dangers?
Depreciation doesn’t have to be as complicated as you think
No Predevelopment Design
Spreadsheet dangers
No DocumentationCell ReferencesManual Formulas
Manual Sorting
Version ControlNo Audit Trail Manual Data EntrySecurity Concerns
Fraud Concerns
Inconsistent Reporting
Worksheet Updates
Sarbanes-Oxley
03 December 2014Depreciation: Overcoming the costs of spreadsheets 10
Data control
03 December 2014Depreciation doesn’t have to be as complicated as you think
• Spreadsheet knowledge tied to personnel
• Introduces the challenge of “version control”
• Minimal security and access control options
• Spreadsheets do not scale well with growing businesses
• Have to incorporate formulas for changing tax law by hand
Data control with spreadsheets is a headache. Here’s why:
Data integrity
Depreciation doesn’t have to be as complicated as you think
Dirty data impacts multiple parts of your business:
• Bad reports
• Inaccurate asset values
• Inaccurate asset counts
• Potential audits
Real world examples: Eastman Kodak Company
“Eastman Kodak Company restated financial results for the first and second quarters by $2 million and $13 million, respectively, due to an erroneous spreadsheet that calculated severance and special pension-related termination benefits.”
http://www.pcworld.com/article/127189/article.htmlDepreciation doesn’t have to be as complicated as you think
Real world examples: RedEnvelope, Inc.
“Shares of RedEnvelope Inc. tumbled more than 25 percent . . . after the online
retailer of specialty gifts drastically reduced its fourth-quarter outlook” Stanford
Group analyst Rebecca Jones Kujawa said in an interview. “ . . . they were
underestimating the cost of goods sold . . .” RedEnvelope spokeswoman Jordan
Goldstein said the budgeting error was simply due to a number misrecorded in one
cell of a spreadsheet that then threw off the cost forecast.
–Michael N. Day and Stephen Talbot, “Data Validation the Best Practice for Data Quality in Fixed Asset Management,” www.amrnow.com
Depreciation doesn’t have to be as complicated as you think http://www.eusprig.org/stories.htm
Real world examples: CECO
“CECO’s in-house accounting staff has discovered an accounting error in the spreadsheet calculations used by the Company’s construction division for its ‘percentage of completion’ accounting. The net effect will be a cumulative reduction in revenue of $1,969,000 over the four year period 2000 to 2003 with an equivalent charge to pretax net income.”
Depreciation doesn’t have to be as complicated as you think http://www.bizjournals.com/cincinnati/stories/2005/02/07/daily31.html
Spreadsheets kill data integrity
The facts:• “64% of financial spreadsheets audited contained errors. Of those spreadsheets with errors, they
found ten had an error exceeding $100,000, six over $10 million, and one in excess of $100 million.”1
• “AMR has repeatedly found that 65 percent of fixed asset data is incomplete, inaccurate, or altogether missing, while 10 percent to 30 percent of fixed assets are no longer owned.”2
• “30 to 90% of all spreadsheets tested suffer from at least one major user error. In addition, none of the tests included spreadsheets with more than 200 line items, where the probability of error approaches 100 percent.”3
161. http://panko.shidler.hawaii.edu/SSR/Mypapers/whatknow.htm 2.Data Validation the Best Practice for Data Quality in Fixed Asset Management,” www.amrnow.com 3. 2007 study Tucks School of Business at Dartmouth College
How can Sage Fixed Assets eliminate the risks of spreadsheets?
How do Sage’s ERP Systems (like Sage 100) Currently Handle Fixed Asset Management?
Fixed Asset Management is an important part of your business, and it is not a problem addressed by most ERP offerings.
ERP Offering Out of the Box Capabilities
Sage 100 None
Sage 300 None
Sage 500 None
Sage X3 Straight Line Depreciation only. No Tax Laws Included
Sage Fixed Assets is Designed to Integrate with Sage ERP out of box
Depreciation doesn’t have to be as complicated as you think
• Sage Fixed Assets offers
integration for AP/PO asset
creation and automated GL
postings for most ERP’s in the
Sage family.
• Integrating SFA to Sage 100
provides an enterprise solution
Why should I consider integration? We don’t need it…
Purchase new assets in Sage
ERP
Manually export new asset data
from ERP AP/POFormat data for
SFA import
Manually import new assets into
SFARun Depreciation
in SFA
Generate GL Posting report
based on recent Depreciation
Manually export GL posting report
Format GL posting report for
import
Manually Import entries into ERP’s GL
Automated Process Manual Process with chance for errorWithout Integration…
• Data must be manipulated manually, leading to dirty data
• Additional time and people needed to format data for export/import
• Must manually confirm that both systems data is in sync
How does integration provide a complete fixed asset solution?
Assets flow into Sage
Fixed Assets
Run depreciation
on assets
SFA generates GL entries
GL entries flow into
ERP
New assets purchased via ERP AP/PO
With Integration…
• Less manual data entry, which means less human error, leading to cleaner data
• Automated data flow makes processes more efficient, saving time
• Provides a complete fixed asset management cycle
What about the rest of the Fixed Asset Process?
Depreciation doesn’t have to be as complicated as you think
How does inaccurate asset data impact my bottom line?We can estimate the potential impact of inaccurate asset counts using some averages:• Average federal tax rate: 30%
• Average state tax rate: 6%
• Average property tax rate: 3.4%
• Average insurance rate of 0.01 per $1
Begin taking physical inventories of your assets!
Depreciation doesn’t have to be as complicated as you think
Sage Fixed Assets – Tracking
• Takes advantage of existing data in Sage Fixed
Assets – Depreciation
• Ensures when you perform a physical inventory
asset data is accurate and up-to-date
Sage Fixed Assets Database
Sage Fixed Assets – Tracking Sage Fixed Assets – Depreciation
Plan, budget and place WIP’s into service
Depreciation doesn’t have to be as complicated as you think
Sage Fixed Assets – Planning
• Invoices are compared to budgets
• Finished assets are passed into the database
Sage Fixed Assets – Planning
Sage Fixed Assets Database
Start Time: 2:00pm EST
Please type in your questions
Thank You!
For any questions or information about how Sage Fixed Asset can impact your business, contact:
Shaun Garrity | Net@WorkPhone: 800‐719‐3307 Ext. 0817 [email protected]
Pat Russo | Net@WorkPhone: 800‐719‐3307 Ext. 1767 [email protected]
Stephanie Davis | Net@WorkPhone: 800‐719‐3307 Ext. [email protected]
Ashley Bonser | Net@WorkPhone: 800‐719‐3307 Ext. [email protected]