Asset accounting is a little more complicated than recording the purchase price of the things you buy to use as equipment and supplies for your company. You need to depreciate the value of those assets over their expected service life. That means you first have to decide upon the expected durability for that item.
What do you do if an item breaks or gets lost before the end of its predicted useful life? What do you do with that piece of equipment if it still works fine after you have written off its purchase price? What do you do with that thing after the books say it no longer exists? These are just three questions that show non-accountants that asset accounting is not quite as straightforward as it might first seem.
Here is our list of the seven best asset accounting software:
- Redwood Finance Automation: The best asset accounting software overall. This is a cloud-based orchestration system that compiles fixed asset management records from transactional data.
- SAP S/4HANA Asset Accounting: The best asset accounting software for large organizations. A cloud-based ERP that has an extensive fixed asset definition section and can consolidate accounts for branches in different jurisdictions.
- Oracle NetSuite: The best asset accounting software for medium-sized businesses. A SaaS ERP system that provides data entry screens and generates fixed asset GL records from those postings.
- Sage Fixed Assets: The best asset accounting software for small businesses. This cloud-based specialized fixed asset module can be integrated into full accounting packages by Sage and also third-party accounting systems.
- AssetWorks: The best asset accounting software for plants and vehicles. This library of cloud-based solutions offers specialized systems for different industries and asset types.
- Zoho Books: The best asset accounting software for integration options. This package offers straightforward asset accounting with options for more detailed analysis and categorization via a plug-in service.
- Intuit QuickBooks: The best asset accounting software for sole traders. This is a business support package that can be accessed through mobile apps and automatically compiles accounts in the background.
Asset accounting with software
Smaller companies don’t keep qualified accountants on staff and so they need the framework that asset accounting software provides. Large businesses that are big enough to employ a team of accountants have so many assets that no one could ever keep track of the status and value of every piece of equipment without a good IT system to record every variable.
Curiously, the software itself is regarded as an asset. However, if it is delivered on the Cloud-based Software-as-a-Service model, it is an expense. So, your decision on the delivery format of your software influences the shape of your accounts.
The best asset accounting software
There are three formats that you can get for asset accounting software and each influences whether you list that acquisition as an asset:
- On-premises software
- Cloud-based Software-as-a-Service
- Free software
There are a few other options on the type of asset accounting software that you can get. Some systems are known as enterprise resource planning (ERP) packages. These require business departments to enter all of their transactions into the same system. This includes purchase orders, receiving, and the payment process for acquiring fixed assets. The presence of all of this data in one place makes it very easy for the ERP to generate asset accounting entries.
Not all businesses want to replan their business’s entire IT strategy just so that can account for assets better. There is a solution that gives you the data consistency advantages of an ERP without needing through all your existing software away. This is a category of software called orchestration systems.
Small businesses have one more option, which is a category of an accounting package that presents a data entry front-end in the form of a business documentation system. We chose good examples of each of these three types of asset accounting strategies.
What do we look for in the best asset accounting software?
When looking for the best asset accounting software, we prioritized the following factors:
- SaaS systems – As discussed, getting software that is delivered as a service gives you one less asset to account for. This form of software implementation also cuts down the hardware you need on-site.
- Solution range – We made sure to look for a range of solutions that would suit different sizes and types of enterprise.
- Depreciation methods – There are several methods for depreciation that could be used and we have looked for packages that give you a choice.
- Security – We only recommend systems that provide security for data and control system access. User accounts provide activity tracing as well as access controls.
You can read more about each of our recommendations in the following sections.
1. Redwood Finance Automation
The best asset accounting software overall
Redwood offers a SaaS platform that provides a batch processing service. The tool is accessed as a process flow diagram creator. Each stage in the diagram represents a program to run. When the diagram is completed, Redwood generates a script from it. When run, this script will run each software package with the given parameters stated in the settings of the flow diagram stage.
The Redwood Finance Automation package is a service on the Redwood platform that includes templates suitable for use in ERPs and accounting packages. These scripts focus on extracting finance-related data from business process software, transforming it into journal entries, and then inserting records into the company’s books held in an accounting package.
The accounting software needed to hold the company’s books is not included in the Redwood package, nor are the various business process support modules that a company needs for services such as purchasing, invoicing, and payment processing. This means that the Redwood system is particularly useful for businesses that already have their preferred systems in place and don’t want to completely change their software just to automate journal management for issues such as automated asset accounting.
Redwood scripts can be set up for tasks in the business process software, such as enforcing an approvals hierarchy, automated stock reordering, three-way matching for invoice verification, bank reconciliation, and cash allocation for accounts receivable and journal management.
The Redwood system is particularly useful for contentious issues such as account reconciliation at closing and account consolidation for parent companies. The system can unify the account processing procedures for conglomerates that operate many divisions with autonomous accounting systems.
BEST ASSET ACCOUNTING SOFTWARE Redwood Finance Automation is our first choice because it doesn’t require your existing systems to change to provide a unified and centralized accounting system. This package can automate reconciliation tasks that cut down on manual tasks and also help flush out errors and inconsistencies.
2. SAP S/4HANA Asset Accounting
The best asset accounting software for large organizations
SAP is the largest provider of ERP systems in the world and its S/4HANA cloud-based system is the provider’s ERP package for large businesses. SAP has invested a lot of time, money, and expertise into ensuring that this is a very detailed system that can be set up to precisely define operations and generate accounting records from transactional data.
The Asset Accounting system identifies data related to fixed assets and files that information in the accounts accordingly. The transfer of business process data into account journals is automatic and the mapping between activities and account categories relies on activity definitions that are defined in the settings of the SAP system.
The setup process is very complicated. However, the precise way in which the mappings from transactions into journal entries lays the groundwork for issues such as local accounting rules for the divisions of multinationals and how those records roll up into the parent company accounts for end-of-year reporting. So, although defining the books takes a lot of time, it is worth the effort because it standardizes the treatment of data and allows a high degree of automation.
3. Oracle NetSuite
The best asset accounting software for medium-sized businesses
Oracle NetSuite is a comprehensive ERP that includes an accounting package. This is a rival to SAP’s systems but it is a lot easier to set up and manage. This makes that system more suitable for medium-sized businesses that need features such as international localizations and account consolidation but can’t dedicate the human expertise needed to precisely define how the system should run. This is more of an off-the-shelf package than SAP S/4HANA.
The system can distinguish between stock and capital assets. The Oracle NetSuite service includes data entry screens that generate purchase orders and note the receipt of goods. This data is automatically transferred into the accounts. The system automatically implements depreciation and allocates sums appropriately to different asset and expenditure categories.
4. Sage Fixed Assets
The best asset accounting software for small enterprises
Sage produces a range of accounting and business process management tools and hosts them on its cloud platform. Although all of its accounting packages deal with asset accounting, the company also offers a specialized Fixed Asset management product that is necessary for businesses that are capital intensive.
Sage Fixed Assets can be integrated with any of the broader accounting packages offered on the Sage platform and also SAP, Oracle, JDE, and Plex systems. It would only be necessary to subscribe to this package if your business uses a lot of property, plant, and equipment (PP&E). A typical small business that would fit this description would be a company that provides outsourced construction services using its equipment.
Sage is very good at presenting clear pricing and offering free trials for its accounting packages. However, it doesn’t provide that level of clarity for the Fixed Assets system. The way to assess this tool is to request a demo.
5. AssetWorks
The best asset accounting software for plant and vehicles
AssetWorks is a cloud platform that offers a range of fixed asset management and accounting packages that suit many different types of organizations. This is very similar to the Sage Fixed Asset product, except it caters to much larger organizations. Examples of users of AssetWorks are local government and infrastructure authorities.
The type of service you get from AssetWorks depends on which of its packages you select. However, overall, this system can combine strategies such ads maintenance and financing with accounting tasks, such as depreciation.
The AssetWorks system does not produce accounts. Instead, it calculates valuations and depreciation and then generates records that can then be inserted into accounting packages either through an integrated processor via an orchestration package.
6. Zoho Books
The best asset accounting software for integration options
Zoho Books is a straightforward bookkeeping and accounting package that is delivered online. The power of this product for businesses that need to include asset accounting in their system is the range of related products that can be integrated into the Zoho Books system.
The standard Zoho Books offers options for calculating depreciation. However, for those businesses that have complicated asset ownership scenarios, it is possible to extend the Zoho Books system with a plug-in. Zoho Marketplace offers a library of add-on services, most of which are charged for.
Among the plug-ins available for Zoho Books is the Asset Register with Depreciation Calculation from M M Consultancy Services. This provides monthly depreciation calculations and also treats issues such as prepayments for warranties and support packages. As it is a plug-in, the work of this tool is available directly within the Zoho Books environment and it performs its account adjustments automatically.
Zoho Books can be subscribed to as part of a wider bundle of Zoho utilities that join together to provide a full ERP and all of the software that any business could need. These plans include Zoho Finance Plus and Zoho One.
Zoho Books is offered in four plans ad the first of these is Free. You can get a 14-day free trial of any of the paid plans.
7. Intuit QuickBooks
The best asset accounting software for small businesses
Intuit QuickBooks is designed for owner-operated businesses and is laid out in a way that the user isn’t aware that accounting calculations and allocations are being implemented. The system deals in terms of regular business transactions, such as making a purchase or issuing an invoice. It is ideal for contractors, freelancers, and consultants who need to focus on their core activity and don’t have time to write up the books.
Few people realize, when going independent, how much time the administration of a company can take. Typically, sole traders focus on their work and put off administration tasks, such as doing the accounts. QuickBooks caters to this type of sole trader.
Accounting for fixed assets is built into the QuickBooks system. However, it isn’t as automatic as all the other accounting processes in this clouds-based system. You have to manually identify purchases and fixed assets, otherwise, they will be run through the accounts as stock.
Despite that one requirement to mark goods as assets, the user can pretty much ignore the accounting functions that run in the background of the QuickBooks system. It is even possible to use this system to tun your business through your mobile device.
