Protect Your Fixed Assets

Assets are important to your organization and help you accomplish your mission. Tracking those assets is just good management practice and provides for internal controls. Form 990 requires reporting on signification disposal of assets, but tracking asset information also helps you budget for replacement of those assets. Disposing of assets may have tax consequences, so it is important to record disposals correctly.

When events like Hurricane Sandy or other disasters occur, having a good fixed asset system in place provides you with solid data to report what was lost, file insurance claims, and get back to business quickly.

Assets can be current or long-term. Long-term assets are usually called fixed assets in the accounting world. Fixed does not mean immovable. Fixed means it is an item or intellectual property that will last or be used for more than a year.

My super-duper purple power stapler is a huge asset (to me!) and necessary for my everyday tasks but is not an item tracked as an organization asset. Should a natural disaster strike, everything lost will need to be replaced. Even though all the staplers may have whirled away in a tornado, staplers are not the type of items classified as assets for accounting purposes.

Fixed assets are items intended for continuing use and are used up over time. Each item will have a recognized life. A building will have a life of 20 years or more. A vehicle may have a life of only three years. Depreciation expense is recorded to recognize the wearing out or “using up” of the asset.

While my purple stapler may be heavy duty and last 20 years, the cost of the item plays a role in determining asset status. Organization policy usually dictates the cost threshold for determining asset status. Accounting rules are also considered. So while my stapler might outlast some vehicles, the cost for stapler will eliminate it from the asset list.

A good fixed asset system will provide for quick and efficient asset entry at the time of purchase, accurate tracking, customized depreciation calculations, and user-friendly reports for quick analysis.  Here are 5 features of a good fixed asset system.

1. Quick Asset Entry – Wouldn’t it be nice if assets could be entered into the fixed asset ledger when the invoices for the asset purchase are entered into the system?
2.  Track Asset History – Be sure you can track warranty information, manufacturer information, serial numbers, and repair history into the asset record. You may scan and attach important source documents directly to the asset record.
3. Depreciation – Use one of four standard depreciation methods or even better find a system so that you can set up customized depreciation methods to generate accurate journal entries to record depreciation monthly, quarterly, or annually.
4. Accounting Entries – the system is capable of complex journal entries to distribute expenses across programs, departments, and more using percentages or units such as square feet.
5. Reporting – You can easily analyze depreciation calculations and accounting entries with detailed reports before you accept the figures.

And, yes Sage 100 Fund Accounting’s Fixed Asset Module does all of the above.  Want to learn more?  We have two webcasts coming up:

The How and Wow of Tracking Fixed Assets With Sage

Thursday, January 31, 2013 at 2 p.m. ET and Wednesday, February 13, 2013 3 p.m. ET  Register Now

Laura Reifschlager
Trainer
Sage Nonprofit

 

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Looking To 2013

This is the time of year when many individuals donate to nonprofit organizations, but will that be enough? A new survey report entitled Non-Profit 2013 Financial Outlook, Reporting, & Systems reveals the top priorities and challenges facing nonprofits in 2013. According to Shereen Mahoney, CEO of Brittenford Systems “2013 will likely require non-profits to rethink revenue model and income strategies, while improving strategic planning and program results.”

There are a number of challenges nonprofits face in 2013 including reduced government funds, reduced charitable donations, increased competition, increased demand for services, and the list goes on and on.

Many people are not aware of it, but the nonprofit community is an enormous contributor to the American economy. During the recessions of 1990-1 and 2001-2, nonprofits actually increased their number of employees by 2.38 % a year while for-profit jobs declined at an annualized rate of 2.2 %. The nonprofit sector provides 5.5% of the nation’s entire GDP or $751 billion worth of output.  Without nonprofits, many needs will go unmet.

So, what can be done?

The key to turning things around for nonprofits is… TECHNOLOGY. Okay, you’re not surprised to hear that from the marketing director of a technology company, but, it is true! Technology can help tremendously in three key areas: creating awareness, reducing costs, and increasing donations.

First, creating awareness. In order to be considered for donations, the public must be aware that your nonprofit even exists. Awareness can be established through many channels, but for the sake of this post we will focus on the value of technology and social. As you can see below, the growth continues to increase year over year, and while it may not directly tie to increased revenue. Social does tie to increased awareness.

Second, reducing costs. You have probably already seen your new budgets, and my guess is they call for flat expenses or reduced expenses and increased donations. How are you supposed to do that? Well, a constituent relationship management (CRM) system and a proper fund accounting system can help your staff achieve much more with less. Automating financial functions through an integrated accounting system where the donor’s details have to be entered only once and are accessible to all staff makes good business sense. It can help you with audits, reporting, and even bringing in more donations.

Plus, fundraisers all understand the value of building relationships. A CRM allows you to recognize and reward your donors, track their actions, and organize the relationship \and the value of all of this is of course; my favorite topic, donor loyalty.

If that is not enough, the cost of quality software as really become more affordable with subscription offerings. For example, you can get a complete end-to-end solution with Sage starting at $249 a month. That price point puts technology in the hands of nonprofits that were not able to afford it before.

Finally, increasing donations. The vast majority of nonprofits are still not capable of accepting online donations. It is a must! I am not a proponent of getting rid of direct mail campaigns; I love direct mail. I am a proponent of integrating all of your marketing channels to drive to one call to action. Donate! Increasingly, your younger donors expect the convenience of visiting your website or Facebook page and clicking a link that drives them directly to an easy to donate to, fully integrated form.

Plus, online donation technology allows you to create peer-to-peer fundraising campaigns, simplify event fundraising, and so much more. All of which could increase donations, and allow you to find new prospective donors.

Take-away: For the sake of the economy, take a look at technology this year. If you are already using technology learn something new about it, attend a training class or get with a peer group. As with all things technology is unendingly changing and improving. Learn more to do more, and have a great 2013. Happy New Year!

Bridget Brandt
Marketing Director
Sage Nonprofit

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