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By Sam Hunter
The Case For Automation
The John Lynch Company, a premier managing agent for retail and office development in Central New York, migrated from spreadsheets to automated fixed assets software about three years ago. “We wanted to move to a monthly process of depreciation and amortization so we could have a more accurate picture of our fixed assets,” says Maureen Navatka, property management accountant for The John Lynch Company. “Previously, our accountants entered fixed asset information once per year. Now, the monthly fixed asset management process is handled by me.”
Adds Navatka, “Every building we manage has its own general ledger, which can get complicated. Having user-friendly fixed assets software helps. We input user-defined fields for reports and can group assets either by the building where the asset is located or by type of asset, such as all commissions paid for all four locations or buildings. Flexible asset grouping allows an accountant to analyze fixed asset data from different angles in order to make good asset management and income tax decisions."
The added complexity of adhering to legislative actions, such as Sarbanes-Oxley (SOX), may seem like something a small business would never consider, but if that business ever plans to go public, or be acquired by a public corporation, sound accounting practices, in all areas, is essential. Ensuring compliance today is much easier than going through a lengthy review process, and an automated fixed asset management tool can make that possible quite easily.
“Although we were a private company before we were acquired in 2006, we have always strived to maintain best finance and accounting practices, including SOX-based reporting,” says Dave Sirois, controller for Cambridge, Mass.-based MathSoft Engineering & Education, Inc., a leading engineering calculation solution provider and a division of PTC, the Product Development Company™. “Automated software gives us fantastic back-up for our auditors and lets us track fixed assets using serial numbers and view forward depreciation projections. Those forward projections came in handy when we were preparing to be acquired”
About six years ago, MathSoft moved from spreadsheets to software for tracking and depreciating its 800 fixed assets. Adds Sirois, We switched to automated software after we found a cumulative error spanning three-plus years in the spreadsheets. Someone failed to carry over correct numbers, so our calculations were off by a significant amount. We had to go through years of data in order to find the error and correct it.”
Small business owners may wonder how difficult it is to research, purchase, install, and use an automated fixed assets system. It’s actually quite easy, and the best solutions come ready to be integrated to a business’ existing accounting process, making it simple to import existing fixed asset inventory information and start tracking and depreciating. Good fixed asset products also integrate with most general ledger solutions.
“I truly believe the less human interaction, the better, when it comes to your finance systems,” concludes Sirois. “Automated software gives me a great deal of comfort. Besides making reporting easier, it gives me capabilities that spreadsheets simply can not – at least without a lot of effort and set-up.”
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