Let’s Show Some Appreciation for Fixed Assets Depreciation

Fixed asset tracking is an often undervalued (pun intended) business finance function. While payables and receivables require near constant attention and payroll muscles in every week to steal the show, fixed asset tracking hums along in the background, rarely making a peep. We think it’s time to give fixed asset tracking, specifically depreciation, the attention it deserves. Here we lay out some evidence for why your depreciations could use some appreciation — and we’ll introduce Sage Fixed Assets the perfect fit for managing fixed-asset lifecycles and depreciation calculation.

Watch the on-demand webinar: Sage Fixed Assets – Powerful Depreciation Calculation

Ghosts and Zombies Lurk Year ‘Round

While it’s October now, ghosts and zombies can haunt you long after Halloween is over and you’ve eaten all the leftover, bite-sized Snickers bars. All puns aside, ghost and zombie assets can result in some serious tax liability, compliance-standards violations, and profit loss.

As a reminder, ghost assets are those that have been fully depreciated and passed the end of their useful life but are still being expensed on the income statement—thus leading to erroneously low net income. Zombie assets are those that are active within their useful life but aren’t properly expensed on the income statement—thus leading to erroneously high net income.

It can be easy to miss ghost assets in those scary spreadsheets you’re using to track assets. But these little gremlins can wreak havoc on your financial statements and could expose you to fines, penalties, a damaged reputation, loss of customers, a decrease in profit margins, and even jail time for executives. It’s true, in a 2019 Aberdeen study, 25% of respondents noted jail time as a prominent risk of noncompliance. While zombie assets generally don’t carry the same compliance risk as ghost assets. Instead, they can make a frightening hit to your bottom line. Since you’re not depreciating them on your income statement, you’re missing the benefit of reduced tax liability. Boo.

Sage Fixed Assets—Depreciation is Heavy on the “Treats”

In our work with companies large and small across dozens of industries, we’ve found that the most common depreciation software is Excel. Sure, it’s possible to perform depreciation calculations in Excel, and it’s possible you’ll get them right every month. But there’s also the possibility of data entry and formula errors that might not even get caught. Overlooking those errors can cost you dearly, as we note above. That’s why we recommend Sage Fixed Assets Depreciation.

The Sage Fixed Assets Depreciation module helps you accurately manage the entire fixed-asset life cycle—from acquisition to transfers and disposals. There’s flexibility built in with more than 50 depreciation methods (including a user-defined option):

  • MACRS formula and tables (150 percent and 200 percent)
  • ACRS, Straight Line (method for U.S. tax and financial purposes)
  • Remaining Value over Remaining Life
  • Declining Balance (with and without an automatic switch to straight-line at the optimum point)
  • Sum-of-the-Years-Digits

In addition to the 50 depreciation methods, there are deep reporting capabilities within Sage Fixed Assets Depreciation, including more than 30 standard reports, including year-end financial statements, fileable U.S. IRS tax forms and worksheets, as well as Schedule 8 Capital Cost Allowances for Canadian T2 Corporation Income Tax Returns.

If you’re ready to get serious about this, note that Sage Fixed Assets Depreciation also includes the ability to allocate cost and depreciation for an individual asset or group of assets to more than one funding source and the ability to create budgetary books for asset budgeting projections.

Sage Fixed Asset Depreciation is part of the larger Sage Fixed Assets application that also offers Planning and Tracking capabilities. The best part? Sage Fixed Assets Depreciation is fully integrated with Sage 100. Ready to learn more about depreciation? Then you might appreciate our on-demand webinar. You can also download the Sage Fixed Assets datasheet for more information. As always, contact us with your questions.

Sage Fixed Assets: Complete Solution for Managing the Assets Lifecycle

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Depreciation: Gain the flexibility to effectively manage the entire lifecycle of your fixed assets with the Sage Fixed Assets Depreciation module. Streamline year-end financial statements and tax returns, allocate costs, calculate depreciation, eliminate redundant data entry, and store digital images of important asset records.

Tracking: Simplify the task of keeping track of your fixed assets with automated inventory functionality and built-in reconciliation capabilities. Sage Fixed Assets—Tracking makes asset management a breeze.

Planning: Take charge of your assets even before they become fixed assets. Manage capital budgeting and construction projects in progress with ease and flexibility.

Reporting: Unleash your creativity with a wide range of custom reports. Add charts, graphs, and advanced formatting to your reports for a visually appealing presentation.