Automating Your Fixed Assets Lifecycle


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Automating Your Fixed Assets Lifecycle

  1. 1. Automating Your Fixed Asset Lifecycle
  2. 2. Objectives <ul><li>Upon completion of this session, you will be able to: </li></ul><ul><ul><li>Understand how you can integrate with a financial system (ERP/GL), calculate book and tax depreciation as well as reconcile from book to tax </li></ul></ul><ul><ul><li>Understand how you can automate the tracking of fixed and intangible assets, calculate appropriate depreciation, and remain in compliance for tax compliance and reporting purposes. </li></ul></ul><ul><ul><li>Understand how you can streamline your apportionment, federal and state E-file requirements, property tax declarations and international assets. </li></ul></ul><ul><ul><li>Understand how you can integrate with Vertex- Income Tax. </li></ul></ul><ul><ul><li>Understand how this tool can facilitate your operational and tax planning and responding to enterprise-wide requests related to your asset data. </li></ul></ul>
  3. 3. Who is Red Moon Solutions? <ul><li>Products/Services </li></ul><ul><ul><li>Fixed Assets Manager™ (FAM) </li></ul></ul><ul><ul><ul><li>Supported Andersen’s internal U.S. tax practice </li></ul></ul></ul><ul><ul><ul><li>SAP Business One Certified Solution Partner </li></ul></ul></ul><ul><ul><li>Like-Kind Exchange Matching™ (LKEM) </li></ul></ul><ul><ul><li>WorldPro™ Expatriate Solutions </li></ul></ul><ul><ul><li>PowerOLAP ™ - Tax Department Business Intelligence Solutions </li></ul></ul><ul><ul><li>ARMS ™ - Actuarial Risk Management Solutions </li></ul></ul><ul><ul><li>Consulting Services </li></ul></ul><ul><ul><ul><li>Implementation & Integration </li></ul></ul></ul><ul><li>Founded by Jim Shedivy </li></ul><ul><ul><li>Andersen Partner in charge of Tax Technology Enterprises </li></ul></ul><ul><li>Ex-Andersen employees with minimum experience of 6 years </li></ul>
  4. 4. 65% of fixed asset data is incomplete, inaccurate or altogether missing, a potential disclosure risk for executives now responsible for certifying the accuracy of financial data as a result of Sarbanes-Oxley compliance. - Asset Management Resource (AMR)
  5. 5. Financial System Integration
  6. 6. Financial System Integration Challenges <ul><li>Need for tax department to involve IT </li></ul><ul><li>Disconnect between Accounting & Tax departments </li></ul><ul><ul><li>No knowledge of timing for additions, retirements, transfers </li></ul></ul><ul><ul><li>Asset data modifications </li></ul></ul><ul><li>Financial system data is inaccurate or incomplete </li></ul><ul><li>Required manual manipulation of financial system data for tax purposes </li></ul><ul><li>Use of Financial system for both book and tax depreciation for fixed assets </li></ul>
  7. 7. Pitfalls of Using Financial System for Tax Depreciation <ul><li>Lack of controls and validation when tax data is entered </li></ul><ul><li>Tax law updates are not maintained by vendor </li></ul><ul><li>Costly to maintain for tax purposes </li></ul><ul><ul><li>Tax law maintenance </li></ul></ul><ul><ul><li>Custom tax reports </li></ul></ul><ul><ul><li>Consultants </li></ul></ul><ul><li>Inadequate reports and forms for tax compliance </li></ul><ul><li>Lack of vendor experience in tax technical issues, implementations and support for fixed assets </li></ul>
  8. 8. Options for Integrating Financial System Data <ul><li>Data export from Financial system on a monthly or quarterly basis  Import into Fixed Assets Manager </li></ul><ul><ul><li>Additions </li></ul></ul><ul><ul><li>Retirements </li></ul></ul><ul><ul><li>Transfers </li></ul></ul><ul><ul><li>Asset Updates </li></ul></ul><ul><li>Cons : </li></ul><ul><li>Requires initial IT assistance </li></ul><ul><li>Possible file manipulation for tax mapping </li></ul><ul><li>Not fully automated </li></ul><ul><li>Pros: </li></ul><ul><li>Data reviewed by tax prior to import into tax system </li></ul><ul><li>Ability to make adjustments to incorrect tax data/catch mistakes earlier </li></ul><ul><li>More cost effective </li></ul>
  9. 9. Options for Integrating Financial System Data <ul><li>Use of an intermediary data repository for all tax-related data coming out </li></ul><ul><ul><li>Vertex Tax Data Repository (TDR) </li></ul></ul><ul><ul><li>Data Mart </li></ul></ul><ul><li>Pros: </li></ul><ul><li>Easier access to all compliance data for reporting/planning </li></ul><ul><li>Real-time access to data </li></ul><ul><li>Cons : </li></ul><ul><li>Requires more ongoing IT assistance </li></ul><ul><li>Can be expensive – consulting fees </li></ul>
  10. 10. Tax View – Tax Data Repository
  11. 11. Options for Integrating Financial System Data <ul><li>Complete automation of data moving from Financial System into Fixed Assets Manager </li></ul><ul><li>Pros: </li></ul><ul><li>Complete automation of data </li></ul><ul><li>Less error prone – tax validation enforced </li></ul><ul><li>Process improvement </li></ul><ul><li>Cons : </li></ul><ul><li>Requires consulting/vendor expertise </li></ul><ul><li>Long implementation time </li></ul><ul><li>Can be expensive </li></ul>
  12. 12. Demonstration: SAP® Business One & Fixed Assets Manager
  13. 13. Fixed & Intangible Asset Tracking
  14. 14. Demonstration: Fixed & Intangible Asset Tracking
  15. 15. Incorrect information and errors in fixed asset inventory data are a near universal problem – resulting in significant and unnecessary tax overpayments of 8% to 20% - Asset Management Resource (AMR)
  16. 16. Streamlining Apportionment, Property Tax, and International Asset Tracking
  17. 17. Sample Fixed Asset Workflow Book Type Setup Foreign (Great Plains) LS
  18. 18. Future Fixed Asset Workflow Book Type Setup Workflow/Doc Mgmt FAM - Accounting & Tax Generate & Integrate <ul><li>WORKFLOW: </li></ul><ul><li>Quarterly Provision </li></ul><ul><li>Estimated Payments </li></ul><ul><li>Compliance </li></ul><ul><li>Reporting </li></ul><ul><li>Audit </li></ul><ul><li>Planning </li></ul>Provision Software Fed/State Income Tax Software Data Integration Detail, Summary & ALL Filings FAM™ Property Tax Declarations
  19. 19. Fixed Asset Challenges <ul><li>Location tracking both domestic (state & city) & foreign: </li></ul><ul><ul><li>Custom views </li></ul></ul><ul><ul><li>Report grouping </li></ul></ul><ul><ul><li>Search capabilities </li></ul></ul>State Apportionment <ul><li>Location tracking both domestic (state & city) & foreign: </li></ul><ul><ul><li>Custom views </li></ul></ul><ul><ul><li>Report grouping </li></ul></ul><ul><li>Improve accuracy of disposition & transfer tracking </li></ul>Property Tax <ul><li>Track data by foreign location </li></ul><ul><li>Units for depreciation tracking </li></ul><ul><li>Reporting in any currency </li></ul><ul><li>Add-on module for currency conversions </li></ul>International <ul><li>40+ standard reports & fileable forms </li></ul><ul><li>Custom reports </li></ul><ul><li>Add-on module for analytics and planning </li></ul>Reporting
  20. 20. Income Tax & E-File
  21. 21. Fixed Asset E-file Requirements
  22. 22. Lifecycle Automation
  23. 23. Tax Ecosystem: Driving Information Requests Tax Department Auditors Accounting: FASB Regulation: SEC Tax: IRS & States Internal Customers: CFO/CEO
  24. 24. What are tax departments saying? “ We can’t get the information we need from our tax systems.” “ I spend too much time trying to manipulate data in Excel because standard reports don’t meet my needs.” “ It takes forever for IT to respond to our requests.” “ It takes too long to provide required information.” “ We do not have enough time to focus on tax planning and managing tax risk.”
  25. 25. Multi-dimensionality actual/ forecast location period asset class entity entity asset class location entity asset class
  26. 26. How will OLAP improve fixed asset reporting? <ul><li>“ On-the fly” flexible analysis of real-time data </li></ul><ul><li>Unlimited number of reports – “slicing & dicing” </li></ul><ul><li>Replace many static spreadsheets with one multi-dimensional cube for slicing </li></ul><ul><li>Reduce time spent manually manipulating and massaging data in Excel </li></ul><ul><li>Free up resources for planning & strategic decision-making </li></ul><ul><li>Information is a company’s greatest asset </li></ul>90% analysis; 10% crunch
  27. 27. How do you & your company benefit? <ul><li>Enterprise solution </li></ul><ul><ul><li>Robust & scalable </li></ul></ul><ul><li>Cost effective </li></ul><ul><ul><li>Fast ROI – measured in days & weeks </li></ul></ul><ul><ul><li>Low total cost of ownership (TCO) </li></ul></ul><ul><ul><li>5-user license fees at $10,000 or less </li></ul></ul><ul><ul><li>Implementation time as short as a few weeks </li></ul></ul><ul><li>Leverages investment in Excel knowledge </li></ul><ul><ul><li>Security-enabled </li></ul></ul><ul><ul><li>Reduces sheer number of spreadsheets maintained through data sharing </li></ul></ul>
  28. 28. Contact Information <ul><li>Thank you for joining us today. </li></ul><ul><li> </li></ul>