Fixed Assets Lifecycle – Budgeting to capitalization.

Fixed Assets Lifecycle – Budgeting to capitalization.

 

Fixed Assets Lifecycle – Budgeting to capitalization.

For any industry, the management of the asset lifecycle becomes a cumbersome process if it is not managed effectively. Capital budgets need to be planned, approved and managed.  Using an effective solution can assist any company in planning the capital budgets effectively, making the approval system simpler and streamlining expenditure management. AccTech’s budgeting solution allows users to use a streamlined workflow process to plan for budgets either at a high level, or at an itemized level.

 

The planned budgets can then be taken through the full cycle of adapting the budgets, approving the final result, and eventually procuring assets against the budgets. At any given time, new forecasts can be submitted, which allows for better reporting and better planning of expenditure. It is also possible to change a budget at any time if the correct workflow approvals are given.  This change can either be due to scope change, cost changes or even re-allocation of funds from one budget to the next.

 

The solution offers a seamless integration between budgeting, procuring, capitalizing, asset transactions and eventually disposing of the assets. With each step of this process a workflow can be in place to manage the process of authorization and insures that the right segregation of duties is in place. Once budgets are approved users can add purchase request, purchase orders or invoices against the budgets.  This improves the ability of management to see the effect of commitments against budgets against actuals at any time, and allows for effective payment planning.

 

Once an asset is received it is considered part of work in progress, which means it is still part of the capital expenditure, but not yet capitalized.   An asset can be capitalized through an automatic process or through a user process that allows the user to combine multiple work in progress items, and capitalize them as a single asset. The capitalization entry will then clear the work in progress of these items, and capitalize them in the correct category.  This function allows users to take assets from various budgets and capitalize them correctly.

 

Once capitalized the assets are managed through a fixed asset module.   Insuring that they are depreciated in line with IFRS/GAAP/IAS standards.  The can also be managed for tax purposes in line with the countries tax laws.  Transactions such as impairments, revaluation, change of life, improvements and residual value changes can easily be applied to any asset. Each of the transactions generate the correct GL entries per account and allows a user to post the entries.

 

By using barcodes and a mobile device, such as an iPad, assets can be tracked physically as they are moved between various departments, location and from one responsible person to the next.  Regular verification also increases the control that user has over the fixed assets and where they are in their lifecycle. Once the asset has reached its end of life, either due to age, high cost of repairs or simplify becoming obsolete for its function, the asset can either be sold or scrapped.  The sales transaction can also be seamlessly integrated with financials, so that a user will only generate the sales invoice and from there create the sales entry on an asset.

 

This means that the asset is managed from its inception stage as a budget, all the way to the stage where it is removed from the company. With workflows, the solution allows for seamless processing and for complete visibility on reports. AccTech has a solution for each of the areas above, either fully integrated with existing software, or as a full solution.