Fixed Assets Systems: Square Peg, Round Hole? Part II

Posted by Kelley LearcloseAuthor: Kelley Lear Name: Kelley Lear
Email: kelley.lear@redmoonsolutions.com
Site: http://blog.redmoonsolutions.com
About: Kelley is a member of the executive leadership team and leads our sales and marketing efforts at Red Moon Solutions. Kelley’s extensive experience in project management, product management, and consulting with Fortune 500 and Global 1000 clients is extremely important in this role.See Authors Posts (106) on Aug 26, 2010 | 0 comments

This blog is the second in the series “Fixed Assets Systems: Square Peg, Round Hole”. To learn more, read the first blog, which touched on fixed asset systems’ necessary qualities.

ERP systems have been built by and for accounting professionals.  They do not keep tax experts on staff nor do they develop tax technical capabilities; it is just not their mainstay.  When dealing with any type of system, even systems that tell companies they can handle all depreciation requirements for tax, be leery.  In our experience, those promises usually aren’t the reality.

These systems have the ability to track tax related compliance items, however tax calculations and full compliance for Federal, State, AMT, ACE and foreign books would need to be custom coded into those applications by one of two groups: internal IT professionals who have the experience, or outside consultants who are often expensive.  When those tax rules change from year to year (and throughout the same year), those IT resources or outside consultants need to be scheduled and/or contracted with, then the changes must be made and fully tested.  In addition, since the ERP module is a “mission critical” application, even once the changes are made, it does not necessarily mean they will launch the updates into the production environment right away.  They may require tax to wait until a next major upgrade window. This is just unacceptable for tax!

Again, I agree with Deloitte when they say there is not one system for everyone. I suggest that you arm yourself with the facts when confronted with IT who says the ERP system you have implemented or upgraded to will do everything you need for tax.  Many vendors out there have white papers or other resources on this very topic.  We have a white paper that includes sample Q&A’s that we have learned over the years from tax professionals such as yourselves, who have been told to fit a square peg into a round hole.
Image Credit: Jeff Sandquist