It is difficult to ignore the news lately on the weather channel.  Snow storms have destroyed roof tops, and caused water damage. Is your business in a Federally declared disaster area? If so, you may qualify for a special depreciation allowance.  The Qualified Disaster Zone Property Depreciation allowance is for property   placed in service in federally declared disaster areas in which the disaster occurred before January 1, 2010.  If the company you work for is in one of the states suffering,  it may benefit you to make sure the depreciation software you use, has this allowance incorporated.

A list of the federally declared disaster areas is available at the FEMA website at www.fema.gov.  Your property has to meet certain  requirements such as:  

• It is one of the following types of property.

1. Tangible property depreciated under MACRS with a recovery period of 20 years or less.
2. Water utility property.
3. Computer software that is readily available for purchase by the general public, is subject to a nonexclusive license, and has not been substantially modified. (The cost of some computer software is treated as part of the cost of hardware and is depreciated under MACRS.)
4. Qualified leasehold improvement property (defined under Qualified leasehold improvement property on page 25).
5. Nonresidential real property and residential rental property.

• You must have acquired the property by purchase (as discussed under Property Acquired by Purchase in chapter 2) on or after the applicable disaster date, with no binding written contract for the acquisition in effect before the applicable disaster date.
• The property must rehabilitate property damaged, or replace property destroyed or condemned, as a result of the applicable federally declared disaster.
• The original use of the property within the applicable disaster area must have begun with you on or after the applicable disaster date.
• Substantially all (80% or more) of the use of the property must be in the active conduct of your trade or business in a federally declared disaster area, occurring before January 1, 2010.

For a full list of requirements visit http://www.irs.gov/publications/p946/ch03.html

FAS by Sage Software is not available as a Web Based solution.  So, how can I get my customers access to the program, the data and make edits from multiple locations nationally or internationally?  EASILY is the answer.  A few months ago we successfully moved our licensed copy of FAS Asset Accounting and FAS Asset Inventory to a hosted environment.  This will allow our Project manager to access data from anywhere while also working on database conversions for clients.  In the past years we did this on a laptop while traveling. What if the laptop crashes? How can my client see progress on the inventory if I am using a laptop to create the inventory session? 

These and other concerns are now put to rest.  Hosting Fixed Assets has other benefits and most important is now affordable as well.

• Less requirements for hardware
• Administration and server maintenance costs drop
• You only pay for the space you use

There is a nice comfort level knowing IMS can be in a Starbucks somewhere in America, and still access our  FAS Asset Inventory data for a Web Demonstration or even for database work!

To budget or not to budget costs? That is the question for 2011.

 This week our company is off and running to conduct another asset inventory.   When I mentioned this to a friend of mine, they asked politely  ,” Really? Companies have the money right now for an inventory of all their computers, servers and other equipment?”  Even though it sounds so cliché, my answer was a firm and quick, “ They can’t afford not to!”

A lack of security solutions for jobsites and equipment costs contractors over $1.3 billion per year in lost assets and productivity. From appliances to equipment, if it’s portable it can be stolen.

Some of the top reasons for an organization to budget the cost for an asset inventory:

1. Need to know where surplus is located in the organization – As companies downsize, the need to use equipment sitting idle becomes crucial. Distribution of fixed assets will reduce your companies expense ledger.
2. Legacy inaccuracies become someone’s new problem -  We hear all the time from clients that they are new or have just taken over the role of Fixed Assets, and the data is a mess!  Ultimately, the person no longer responsible for them will not be reprimanded, the new person will!  A clean and accurate database will make everyone’s job easier.
3. Audits can produce penalization fines: Time and time again a customer relates to us that the reason they are spending the money on a 3^rd party for the inventory service is due to a fine or penalization from an auditor.   Sarbanes Oxely was designed to hold organization accountable.

 Be a Boyscout – “ BE PREPARED”

Technical support and maintenance for depreciation software: Do we REALLY need it?

Have you called Technical support lately for any software that you use?  I venture to say you have called at least 3 times in the past year.  We have at IMS!  Whether you forgot a simple function or needed a little hand holding while completing a function you have never done before, technical support is a security blanket we all should have.  Some annual technical support fees also include other benefits that may be the reason a company decides to renew this service.  Most fees for depreciation software technical support are paid for in advance and on an annual basis, but may vary depending on the manufacturer.

One reason to maintain your support is to keep your fixed asset ledger updated to meet current legislative changes that include tax benefits for many organizations.  These changes occur two or three times a year in some cases and the benefits vary depending on the size of your organization.  We at IMS will frequently have companies deny the renewal of their support.  Our customers commonly say things like, “We haven’t called into support in a while,” or “We don’t see the need to spend the money right now. “  Before you make the decision to not renew support, make sure you know how much the new laws could potentially save your company annually and how not having the most recent updates may affect you overall.

Another important reason to stay active with annual support is to get a helping hand when setting up custom depreciation methods and reports. You may think your sort criteria and data selections are perfect, but when the report prints, nothing looks right!  Let the experts guide you through the correction instead of wasting valuable time correcting it yourself using trial and error.  You may find out that a training class on the web is free since you have support.  In many cases, live training is also discounted to support customers.

Finally, you paid for the software to have the best product possible.  Software enhancements are a major factor for software manufacturers to provide the best and most up to date features.  The majority of these improvements are designed to save our clients money and time.  Don’t we all want our jobs to be a little easier and less stressful?

How will the Small Business Jobs Act of 2010 affect your company’s Fixed Assets?

It is that time of year again!  The President signed a bill into law on September 27, 2010, that includes some enhanced business tax incentives.  Now the fun begins for all the manufacturers of depreciation software as they update their product to include these changes. While they are clicking the keys to release the proper updates, take some time to review the changes or hold a meeting with the CPA of your organization to see how it will impact the company.  The primary changes are:

• An increase to the Section 179 Expense Doubling the previous amount from $250,000 – $500,000. This will affect assets placed in service in 2010 and 2011.
• Real Property outside a qualified disaster zone can be expensed under the Section 179 for the first time!  This will affect the tax year beginning 2010 or 2011, up to $250,000.00. Real Property included in this can be leasehold improvement, qualified restaurant property and quality retail improvement property.
• Qualified Computer software property has been extended in the Section 179 Expense for 2011 tax year.
• The bonus first year depreciation known as the Section 168k, is extended one year for qualifying property.
• First year  dollar cap for automobiles is increased by $ 8,000.00
• Cell phones are no longer considered listed property for tax years beginning December 31, 2009.
• Deductible Start up Expenses increased from $ 5,000  to $ 10,000.00 and is found in the details of the Section 195.

As you can see, your company will benefit from many of these changes and updates to your depreciation software.  Sage Software fixed asset experts are implementing these changes into their product SAGE FAS ASSET ACCOUNTING for the upcoming 2011.1 tax update release.  The updates are commonly sent in January or early February.  It may be time for you to call your depreciation software manufacturer and find out if they are preparing your company for these important updates!