Fixed Asset Software sometimes does not get the attention it deserves. Some companies will utilize spreadsheets to track fixed assets and perform depreciation calculations. While spreadsheets can certainly perform complex calculations, they are prone to formula errors and are not the best solution for asset management. A better approach is to select fixed asset and depreciation software that is specifically built for this complicated accounting function. For additional information, read my white paper “Evaluating Fixed Asset Management Software.”
When you have decided to convert from spreadsheets or upgrade your existing fixed asset software, you can choose from a number of asset management solutions. First, you will need to get an approval for the software purchase from your management team. The best approach for justifying the cost is to make a solid business case by calculating Return On Investment (ROI). The purpose of this document is to help you determine the current costs associated with managing your assets and then project potential savings and benefits of an improved solution.
In order to calculate ROI, there are four basic steps involved (see Diagram below). First, perform a need assessment. This can layout any problems with the spreadsheets or your current system. This is also a good place to establish potential benefits of a new fixed asset software package. Second, establish benchmarks of the current monthly and annual processing of fixed assets. Third, define what technology, operational and economic value can be found in a new system. Fourth and finally, present your findings to management with projected savings and intangible benefits that show purchasing new fixed asset software will easily return the cost of purchase in a short period of time.
Once you have performed these steps you are will be armed with the information you need to present your findings to upper management. Use the benchmark calculations as a starting point. Review these numbers and determine how much time and money will be saved with an improved fixed asset management system.
In addition, you need to present the other “value” improvements. While it is difficult to put a dollar amount on some of the intangible benefits, they can have a powerful impact on gaining management approval.
This modified version of a White Paper is intended to give you an overview of how to calculate the ROI for a new fixed asset software package. You can find a more detailed version, including including how to’s on each of the four steps and a handy ROI calculator, on the Bassets White Papers page.
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More information about Bassets eDepreciation software can be found at Bassets.net. While there you can set up a demonstration, download a free evaluation copy and get a personalized pricing estimate.