Fixed Asset Software: What Does It Cost?

Posted by Traci WheelercloseAuthor: Traci Wheeler Name: Traci Wheeler
Email: traci@redmoonsolutions.com
Site: http://blog.redmoonsolutions.com
About: Traci is a member of the executive leadership team and leads our sales and marketing efforts at Red Moon Solutions. She has over ten years of software business experience serving small and large clients in a variety of industries.See Authors Posts (120) on Sep 28, 2011 | 2 comments

There are lots of questions people ask when evaluating new fixed asset software, but one question always comes up. How much does fixed asset software cost? This is not always an easy question to answer, because fixed asset depreciation software costs will vary greatly depending on the approach you are taking. For example, are you looking to purchase a fixed asset depreciation software module that is part of a larger financial system, like SAP or Oracle? Or are you leaning toward a 3rd party fixed assets solution that focuses primarily on depreciation methods and depreciation expense. I am going to focus on the cost of 3rd party fixed asset software here.

The Basics

First, let me explain that most 3rd party fixed asset software is very similar in the asset tracking features and functionality provided. In other words, most fixed asset depreciation software can provide a mechanism for importing data, calculating depreciation expense and providing a standard set of reports. When looking at the cost of 3rd party fixed asset depreciation software, you will most likely consider the following fees:

• Fixed Assets Software License Fees
• Fixed Assets Implementation Fees
• Fixed Assets Training Fees
• Fixed Assets Support Fees
• Consulting Fees
• Other Fees

Now let’s take a look at each area of the fixed asset depreciation software cost a little more closely.

Fixed Assets Software License Fees

The license fees for software to manage fixed assets for depreciation purposes will vary greatly, depending on whether you are looking for a stand-alone (desktop license), a network (multi-user license) or a hosted or online license or subscription. The sophistication of the software you are selecting will factor into the cost. For example, is it an Excel-based solution? Or is a SQL database used, so all company information is stored in one place? With the exception of hosted or online versions, there is typically a first-year fee and an ongoing renewal or maintenance fee. Renewal and maintenance fees for fixed asset software, where tax law updates are provided, is typically substantially higher than maintenance you will see on other software products, in the ballpark of 50% of the first-year fee. The fees are higher because of the ongoing maintenance and updates required annually to be complaint with new tax laws like bonus depreciation. For hosted or online versions, you may find that there is an initial setup fee and then a flat annual fee or a monthly subscription to use the software.  Make sure you fully understand any possible add on costs as well.  Additional license fees may be required for reporting modules, construction in progress (CIP), bar coding, and data import features.

The average cost for a stand-alone (desktop) license in the first-year can range from $500 – $3,000. Network (multi-user) license fees typically depend on a number of factors, including the number of users, number of assets, and in some cases, the number of companies, locations, and books. Fees have a much wider range, i.e. $2,000 – $50,000 (or sometimes more), depending on a company’s parameters. Online or hosted solutions will also vary greatly depending on whether the fee is annual or a monthly subscription.

Fixed Assets Implementation Fees

Implementation fees will vary across fixed asset software solutions. The types of things that could be included in an implementation are:

• Software installation
• Database setup
• Data conversion services
• Security setup

Fees for implementation services will vary greatly depending on the services a company requires. It is not uncommon for hourly rates to range from $150 – $300/hour for these services. The most significant portion of the fees typically comes from data conversion services. The following areas come into consideration when determining data conversion fees:

• Data sources, i.e. number and type
• Number of companies to convert
• Number of books to convert
• Total number of assets
• Cleanliness of data

Fixed Assets Training Fees

Training fees may be provided as part of your implementation fees, or they could be broken out separately. Options include the ability to take remote training via one of the online meeting providers like GoToMeeting or WebEx, or onsite training. Some things to consider when evaluating training:

• Is there a cost per user for training?
• Is training taught by a live instructor at a particular time, or is it pre-recorded and available at my convenience?
• Are training guides available for users to keep?
• Is it one-time training or training available any time?

Fees for pre-recorded or online training can range from free to several hundred dollars. Onsite training will typically range from $150 – $300/hour, plus travel and expenses.

Fixed Assets Support Fees

Many times fees for support are included in the license fee charged. Support can include a toll free number, a knowledgebase, live chat, etc. If support is not included in the license fee, there is usually a support package with a certain number of hours that is available for purchase. Fees for support can vary depending on the number of hours of support a company requires. If no package is purchased, fees may be charged on a per incident basis.  Make sure you understand the support fee structure, so there aren’t any surprises after your purchase.

Consulting Fees

Consulting fees may be part of the cost if there are additional services required. Services might include integration between then new fixed asset software and a company’s financial system. Or, it may be assistance with an acquisition a company just went through. Or even a new report a company requires. Fees for consulting typically depend on the project but could range from $150-$300/hour.

Other Fees

There could be other fees associated with your fixed asset software purchase. The following might contribute to additional fees:

• Add-on modules, such as construction in process (CIP) or inventory tracking
• Bar-coding scanners and/or integration
• Custom report writers
• Import modules (GL and other data imports)
• Project management (on larger projects)

Hopefully, this has been helpful in giving you some idea of the cost associated with a fixed asset depreciation software purchase. Obviously, fees will vary greatly from one company to the next depending on the level of service selected.

Did I forget anything? Are there other fees you have incurred as part of your fixed asset software purchase? I would love to hear from you. Please share in the comments below.