Protect Your Fixed Assets with Sage 100 Fund Accounting (formerly MIP Fund Accounting)

sage-mip-fund-accountingAssets are important to your nonprofit organization and help you carry out your nonprofit’s mission. Tracking those assets is not only good nonprofit financial management practice, but it also helps you establish some good financial internal controls. IRS Form 990 requires reporting on signification disposal of assets, but tracking asset information also helps you budget for the 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, such as Sage 100 Fund Accounting (formerly Sage MIP Fund Accounting), in place provides you with solid data to report on 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 nonprofit accounting world. Fixed does not mean immovable; it means it is an item or intellectual property that will last or be used for more than a year.

While staplers, pens and paper may be huge assets to your staff and necessary for everyday tasks, they are not to be tracked as an organization asset. Should a natural disaster strike, everything lost will need to be replaced. Even though all of the pens and staplers may have blown in a tornado or other natural disaster, pens and staplers are not the type of items classified as assets for nonprofit accounting purposes.

Fixed assets – the kind of assets your nonprofit organization should be tracking – 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 your staplers and pens 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 your staplers might outlast some vehicles, the cost for of a stapler will eliminate it from the asset list.

Sage 100 Fund Accounting (formerly Sage MIP Fund Accounting) is a good fixed asset system that 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.  Take a look at the following top 5 reasons Sage 100 Fund Accounting is considered by many to be a good fixed asset system for nonprofit organizations:

  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.

As you can see, protecting your organization’s fixed assets is critical to your success. Sage 100 Fund Accounting’s Fixed Asset Module can ease your anxiety when it comes to tracking your nonprofit’s assets and allow you to focus on carrying out your organization’s mission to help your community.

Contact us for more information about protecting your organization’s most valuable assets.