Acquisitions of major items like property and equipment make up a significant portion of a company’s annual expenditures. These purchases should be planned for and then tracked against established budgets. A good fixed asset solution will have an integrated module that allows you to establish budget amounts at various levels to ensure flexible reporting.
Bassets eDepreciation includes an asset budgeting option that mirrors the asset maintenance form. This facilitates budgeting at a project level along with more detail based on any of the available user defined fields. The budget maintenance form looks like this:
So within a project there can be budgets established by location, company, division or any combination of asset properties. Reports can then be run throughout the year to track actual purchases against the established budget amounts. Variances can be easily spotted and addressed much sooner than without budgeting.
Using an integrated solution like this to track purchases against established budgets is a very productive way to control costs. Based on your reporting requirements, budgets can be set at a very high level of project. Additional levels can then be added for much more detailed analysis. If you are not currently performing capital budgeting then take a look at module like this to see how it could be utilized by your accounting department.
Most fixed assets are in service for many years, so accurate budgeting is very important since mistakes can be with you for a long time. Correctly establishing accurate budgets is a process that will pay dividends in the future and take out some of the uncertainty in the short term. Many companies report constant improvement in their budgeting process each year as they refine the procedure and get closer to predicting expected annual results.
What do you think? Let us know in the comments.
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.