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Are You Taking Full Advantage of Fixed Assets?

Don’t Miss Out on Tax Savings Opportunities for Your Enterprise

by Carl Thompson | SAPinsider, Volume 18, Issue 1

January 25, 2017

Fixed asset accounting is an important area of finance — depending on asset cost, companies can potentially save millions or even billions on tax deductions. Many organizations overlook fixed assets accounting, however, and fail to take advantage of these deductions. So how can you get the most out of fixed assets accounting in SAP landscapes? This article explains how you can complement your existing technology with efficient, automated processes and fully benefit from fixed assets accounting.  

CFOs, finance executives, and corporate tax professionals alike know how important fixed assets accounting can be and how it can generate significant corporate tax savings when properly managed. Companies could potentially save millions or even billions on tax deductions depending on asset cost, which could instead be used to advance the overall strategic vision of the corporation. For example, new buildings, renovated buildings, and building improvements are often put into service at the longest possible service life despite the fact that a shorter life may be allowed; in some cases, the full deductions can be taken immediately. For example, money spent on routine maintenance on a building or a major system of a building is not considered an improvement and therefore can be deducted. And for smaller companies, there may also be the option of a Section 179 deduction for something such as machinery, for example, that is attached to a building but not a structural component. However, many corporations still often overlook fixed assets accounting and fail to take advantage of these valuable deductions.

So how can corporations get the most out of their fixed assets accounting? The answer is simple: Start with existing technology, find complementary partner solutions, and conquer the fixed assets challenge.

By ensuring fixed assets remain synchronized with SAP systems, companies can trust that data is accurate and delivered in a timely manner.

Start with ERP Systems

In the past, some organizations have leveraged ERP systems such as SAP solutions to provide efficiency and greater accuracy in the accounting process. In fact, a recent software study conducted by Bloomberg BNA revealed that 76.2% of enterprises use ERP systems to manage and record fixed assets. However, ERP systems and other accounting systems sometimes lack the specific functionality needed to manage the entire accounting process for fixed assets. Companies will then compensate with manual spreadsheets and homegrown databases for calculations, management, and reporting, which could introduce errors. The fact of the matter is that ERP systems alone can only get a company so far.

Find Complementary Solutions

When creating an efficient, end-to-end fixed assets process, companies must complement their existing SAP systems with new products that address the specific needs of fixed assets accounting. One way of doing this is by integrating existing SAP accounting and tax compliance systems with a dedicated fixed assets solution such as BNA Fixed Assets to automate processes and make the fixed assets life cycle more manageable. If accounting and tax compliance systems are properly integrated, companies can save time by eliminating redundancies and manual effort in reconciliations and manipulations. By ensuring fixed assets remain synchronized with SAP systems, companies can trust that data is accurate and delivered in a timely manner.

Conquer Fixed Assets

Many enterprises have already conquered their fixed asset management challenges with efficient, automated processes by adding BNA Fixed Assets to their technology portfolio. These companies have experienced benefits such as:

  • Increased cash flow from tax savings
  • Quicker and near-effortless management of fixed assets
  • Greater accuracy and less audit risk
  • Faster close
  • A comprehensive, end-to-end view of all fixed assets

Challenges that come with managing fixed assets cannot always be solved with existing solutions, and manual approaches only put a company at risk. Without the appropriate solutions in place, many companies could miss out on tax savings opportunities, open themselves up to audit penalties, or experience other failures due to poor financial reporting.

To learn more about conquering the fixed assets challenge by implementing an automated, best-in-class solution, visit

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Carl Thompson
Carl Thompson

CPA, Senior Product Manager
Bloomberg BNA Software Group

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