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Companies not ready to automate fixed assets accounting

Published on January 23, 2017

Relatively few companies are using dedicated fixed assets accounting software, according to a new survey, and are instead relying on homegrown spreadsheets and databases. 

The survey, by Bloomberg BNA, which markets its own fixed assets software, found that only about a third, or 37.6 percent, of the 100 U.S. finance executives it polled are using dedicated fixed assets systems. Nearly half of them (or 46.8 percent) said their fixed assets teams spend an average of four to five days a month (or nearly a quarter of their time) on spreadsheet and database maintenance for fixed assets. Another third (34.2 percent) said they spend six to 15 days on spreadsheet and database maintenance for fixed assets. 

They stick with spreadsheets and manually managed databases even though those systems could prove to be risky. Nearly two-thirds of the survey respondents (63.3 percent) admitted they are concerned about data entry errors, while almost half (48.1 percent) indicated they are worried about spreadsheet formula or link errors. Missed tax benefits came in a close third among their concerns, at 44.3 percent. (Many respondents cited multiple concerns about spreadsheets.) 

Nearly three-quarters of the survey respondents (71.3 percent) employ between six and 25 dedicated professionals who focus on entry and management of fixed assets for accounting and tax purposes..

Bloomberg BNA hopes to raise awareness about the drawbacks of continuing to use spreadsheets, given the turnover in many tax departments. A dedicated fixed asset system doesn’t need to rely on a spreadsheet written by a former co-worker. “If you have new people coming in and people retiring, there is a repeatable process that is already documented that a new person can quickly get up to speed on, as opposed to trying to learn a spreadsheet that the predecessor created 10 years ago that everybody is afraid of,” said Tinney. “What usually happens in that situation is they reinvent the wheel and create a brand new spreadsheet. Now the company has paid the same money twice and is not moving the organization forward. If there’s the ability in the tax department to find a champion of change who can get the ear of the tax director, then more companies will move off of these manual processes, homegrown databases and spreadsheets and start gaining the savings.”

(Source: AccountingToday - Daily Edition - January 19, 2017)