Why good asset management is key to making renewable energy a cost effective alternative to non-renewables.
Successful software integrations can cut costs and save time. Find out how to manage your project effectively from start to finish.
How to avoid the most common mistakes that will derail your project
Sam was enthusiastic and friendly as she told me about her project to look for a new asset management system. Her company had built the current system in-house, but as they grew they realised they needed something a bit more comprehensive. It sounded like a great project, but being new to asset management software I didn’t see the warning signs.
Fast-forward 9 months and Sam sounded a lot less enthusiastic and I felt the same. Despite all the initial enthusiasm, and a lot of work, we were still no closer to deciding if the project would go ahead. Where did it all go so wrong?
Looking back, we made three simple mistakes that can derail any asset management project before it even gets going:
Sam’s title should have been a red flag – “Project Support”. It was not her fault, but she did not have the experience or authority to drive through a project this big. When a project does not have an internal project sponsor or ‘champion’ with the authority to agree or veto changes, they usually just get passed on to the potential supplier as an additional feature request.
The lack of a clear, well thought through and targeted project specification increases the risk of an overly complex solution that is delivered late and over budget. The worst case scenario is that the project gets bogged down through a lack of direction and multiple layers of complexity. It eventually gets shelved without ever being delivered, but still at a significant cost to the client.
George Harrison’s lyrics to ‘Any Road‘ could have been the theme for this project – “If you don’t know where you’re going, any road will take you there”. Asset management systems can cover anything from purchasing through production and sales orders, as well as depreciation, tracking and maintenance.
Typically, asset management projects will involve finance, operations and IT as a minimum, so the potential for scope creep is a big risk. Sam’s task was to find the best system, except no one really knew what that looked like.
When I asked Sam which finance package her company used, she sounded a bit surprised and asked why I needed to know. It had not occurred to her that any asset she managed would need to be loaded from somewhere and its value posted back.
A recent survey by the Access Group estimates that almost half of employees in the UK waste 3 hours a day or more on inefficient systems. A lack of integration can wipe out the savings that your new system is intended to deliver.
For more information on getting asset management systems right, have a read of the 10 Steps Guide to Asset Management.
3 big changes an independent Scotland would make to fixed asset management
Whether you agree with the Better Together campaign or not, one thing is clear, from an accounting point of view it would certainly be simpler to stay together. Much has been made of big banks such as the Royal Bank of Scotland’s proposed move out of Scotland if there is a yes vote, but the impact for many smaller businesses will be significant as well. Overnight, businesses across the country could become multi-nationals just by virtue of having a branch in Scotland.
Victoria Stanley, Senior Consultant at FMIS, talks about 3 key issues that will need to be considered by fixed asset accountants and management teams in the event of an independent Scotland.
Bank of England governor Mark Carney and leading figures in Downing Street have made it clear that a straightforward currency union is unlikely. A new Scottish currency could create the need for valuing assets in multiple currencies. For firms using simple Excel based registers or even some off the shelf products, this would be a big challenge.
Having business units in different countries can mean the creation of multiple companies within a group. In addition to the initial complexities of restructuring a business, the changes will need to be reflected in a company’s asset register as well. Simple fixed asset actions like moving an item from one branch to another will now require an inter-company transfer and all the assets will need allocating to one of the companies. Again this is going to get complex when working with a spreadsheet or basic asset management system.
The SNP has certainly positioned itself as a left of centre party, and as the Guardian points out, a new government would need to fund the creation of new systems and structures, all of which seems to point to increasing not decreasing taxes. Different tax rules mean that assets will need to be treated differently depending on where they are.
Where to now?
At the time of writing, the outcome of the vote is too close to call and any changes may take months or years to come into full effect. The reality is, however, that an independent Scotland would mean significant changes to how businesses record their fixed assets and the nice simple spreadsheet is unlikely to be an option.
FMIS asset management software is multi-company, multi-currency and flexible enough to handle international tax reporting requirements. For more information on FMIS Fixed Assets and other products, please see our product pages or contact one of the team directly at email@example.com or on +44 (0) 1227 773003.
Purchase Order Processing case study
Exponent: engineering and scientific consulting
Exponent is an international engineering and scientific consulting company with 25 offices worldwide. Their engineers and scientists have worked on many high profile incidents.
Because Exponent staff are involved in a diverse range of projects, they needed a comprehensive but flexible purchase order processing (POP) software system. Their requirements included access to an approval process that allows their requisition orders to be signed off by the appropriate staff in line with their individual approval limits and project association, before the purchase orders are automatically generated.
Deltek Vision integration
Because Exponent already used Deltek Vision, they needed purchase order processing software that linked directly with their existing system. All FMIS products including Purchase Order Processing are designed to integrate directly with the Vision software. FMIS Purchase Order Processing will automatically match purchase orders against the relevant invoice, with any amends flagged for approval before posting to the general ledger in Vision.
When considering suppliers, Exponent wanted to be confident that their chosen provider had the experience and stability to provide the level of service required over the long term. FMIS software is used in over 40 countries worldwide and has been leading the industry for over 30 years, thus Exponent was able to call industry leading clients, such as Transammonia as a reference.
Leasing software case study
Why the AA uses FMIS Leasing
The AA was recently confirmed as the UK’s most trusted brand*, so it’s great that they trust FMIS Leasing software to forecast, calculate and track the monthly leases for their operational fleet. FMIS was commissioned to reduce the total time it took to prepare the month end accounts for all of the fleet adjustments, additions and periodic forecasts. FMIS was able to reduce the time required for the whole process from several days to a matter of hours.
The AA has a wide variety of lease types that the selected system had to be flexible enough to handle such as:
- Periodic tax changes impacting irrecoverable VAT and the fixed assets values
- Changing maintenance and service provisions
- Multiple invoices within a period
- Extensions of the lease term
- Finance charges based on fixed rates
Tailored dashboards allow all the key stakeholders from Operations through Finance to view the information they need, when they need it and in a format that is useful to them.
As the AA’s requirements have developed, FMIS Leasing software has been flexible enough to grow with them. FMIS provides ongoing support for all their clients including regular product enhancements to ensure FMIS Leasing remains ahead of the game and compliant with all accounting standards, such as IAS17.
* Source: Survey of more than 3,000 people in the UK aged 18-74 between 4 January and 7 February 2014 by Rainey Kelley Campbell Roalfe / Y&R’s BrandAsset Valuator (BAV).
Beware of the fixed asset spreadsheet
It is the age old question in fixed assets. Why pay for fixed asset software when you can keep track of it on the trusty office spreadsheet?
We recently came across an article by Liz Fisher in Accounting & Business which dates back to 2003 (view it here) and most of the issues she raised are as true now as they were then. In an age of increasing pressure on budgets, it can be hard to justify the expenditure of rolling out a new fixed asset or asset management system. Here are 5 reasons why it may just be false economy to go cheap.
1. No audit trail
Spreadsheets have no audit trail. Sure you can do some pretty fancy things with macros and Visual Basic in the background, but in the end someone will always find a way round it (I know, I have tried often enough). Any decent fixed assets software will have a comprehensive and secure audit trail, so when the auditors start asking awkward questions about your assets, you don’t get that sinking feeling in your stomach.
2. It doesn’t really save you time
Researching, purchasing and learning a new fixed assets solution can be time consuming, so surely it makes sense to stick with what you know? The truth is, once you add in the amount of time it takes you to start unpicking the gaps in your data every month and manually creating postings back to the general ledger, it soon looks a bit less sensible.
3. Single point of failure
An accounting friend at a large financial services firm in the UK repeatedly warned me of the risks of using any system that only one person fully understands. Good advice, especially if he had listened to it himself. When one of his team left suddenly, it soon became very clear that no-one else understood the spreadsheets he had been using for the last few years. They had just pressed the ‘report’ button and he looked after the rest. Fixed asset spreadsheets don’t usually come with a very good support plan!
4. Size does matter
It made sense at the time, after all who needs an expensive system to track a few desktops, a photocopier and the microwave? 5 years down the line, business has been good and you now have to try and migrate several thousand assets from your spreadsheet to your new fixed asset register. Most fixed asset software will allow you to do a bulk import, but it is still going to get more complicated the longer you leave it.
5. One size doesn’t fit all
Every area of the business needs to report on fixed assets in a different way. Whilst a commercial solution will do this (to varying degrees), your old fixed asset spreadsheet probably doesn’t. Most often the spreadsheet was started by and designed for one specific department and each area of the business had it’s own one. When you start multiplying that across different offices, divisions and even countries the chances of getting a coherent picture of your fixed asset register rapidly shrink.
10 steps to follow and 10 questions you need to ask
Choosing the right fixed asset management and tracking software for your business can be a complicated process, so we have put together the 10 Steps Asset Management Software Guide to help guide you it. The number of different solutions and providers can make finding the right option pretty difficult if you are not sure what you need. Over 25 years’ experience in providing a range of leading asset management software and solutions have highlighted the importance of asking the right questions before you start. Now we have condensed all these into one comprehensive guide. We’ll cover the 10 simple steps to take and the 10 tough questions you need to ask when choosing asset management software.
10 simple steps
Changing any system can be daunting, particularly when it needs to be closely integrated with other existing systems. Our experience is that breaking down the process into a number of steps makes the transition manageable, far more likely to go smoothly and easier to schedule. These 10 steps will help ensure that you have considered not only the immediate issues, but that your ultimate asset management system meets the long term needs of your business.
- Step 1 Understand the need
- Step 2 Pick a partner not a product
- Step 3 Map the asset life cycle
- Step 4 Decide how to code your assets
- Step 5 Select an asset management system
- Step 6 Integrate related systems
- Step 7 Decide how best to use barcoding
- Step 8 Audit and reconcile
- Step 9 Implement with care and assistance
- Step 10 Maintain, maintain, maintain!
10 Tough questions
A good salesman can make almost any product look like a great option in a quick one off demo, but making the right long term decision when choosing asset management software means asking the tough questions that aren’t always answered in the brochure. If the product is really up to the task, the provider won’t mind going through these 10 tough questions:
- Q1 How easy is it to use and how easy is it to maintain?
- Q2 Are all depreciation methods supported – for every country, legal entity and requirement?
- Q3 Is the system multi-company, multi-currency and multi-book?
- Q4 Can the system be tuned to reflect my own specific requirements?
- Q5 Are reporting and enquiry facilities comprehensive, flexible and easy to use?
- Q6 Can the system handle real-life mistakes and problems?
- Q7 Will it work with my existing systems and be accessible from any location?
- Q8 Does the system cover each and every aspect of asset management?
- Q9 Can the system be used for budgeting and forecasting?
- Q10 How exactly does month end work?
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FMIS Fixed Assets v11 release
The latest version of FMIS Fixed Assets software, v11, has now released. It brings with it significant improvements in many areas, especially for high volume users and those who want to see even more detailed reconciliation reports on their fixed assets at year end.
Many of our clients have already upgraded to the latest version free of charge, but if you are still running an older version, upgrading is normally quick and easy and most importantly free. For more information, or to request an upgrade to FMIS Fixed Assets v11, simply contact us using the form below or via the support page.
Not yet using FMIS Fixed Assets?
If you don’t currently use FMIS Fixed Assets software, you may be interested to know that we offer free upgrades to all our clients. Whenever we make an improvement, we offer it free to all our clients. To find out more about FMIS Fixed Assets, have a look at our product page or get in touch with us directly.
Fixed Assets v11 release – upgrade request
Engineering Sales Order Processing case study
The customer, a comprehensive professional services firm providing design solutions to private and public sector clients, required an efficient sales order processing system integrating with Deltek Vision. Key requirements included: billing interface with Vision, accounts payable interface via invoice matching, strong control over product item master records, including complex bill of material assembly.
Sales Order Processing
The sales order can be made up of many combinations of assemblies, items and services. As a user constructs the sales order the system provides real time control over margins and build specifications. The system allowed an easy set up of all required parts and a straight forward authorisation trail.
Fulfilment: purchase or stock
The purchase order will be automatically routed to the preferred vendor for the associated items within the bill of assembly. Vendor selection can be overridden on the sales order if required. The user can also select the item to come from stock, selecting a specific batch quantity or serial number to be added to the packing list. Any final purchase orders will be emailed to the vendor once any authorisation has been completed.
Vendors receive the purchase order by mail or by email. A system alert manager monitors the progress of the purchase against the required delivery dates. Purchase order amendments can be raised at any time. Utility bills and other contracted costs can also be entered as purchase contracts.
Each category of product has its own set of attributes to be used when recording the eventual receipt of the goods or service. Any serialised item can have make, model, year of manufacture, serial number or any other items captured by electronic entry, manual entry or through the punch-out service.
Equipment and inventory
Any IT equipment is logged into the physical asset register passing on all of the prior information collated to date. The Equipment system allows for asset tracking and automatic reconciliation with the Fixed Asset register.
Vendor invoices can now be easily matched (two, three or four-way) against the system. The batch of vendor invoices are automatically generated into the Vision Accounts Payable system. Any variances, subject to route and category limits, will automate the production of a new purchase order change request.
All part/full shipments will generate a billing entry in Vision with the correct sales order references, quantity and values. Shipping documents can be formatted and templated by the system.