New departmental challenges arise every single day related to massive capital activity to replace aging infrastructure, increasingly complex regulatory requirements, knowledge loss due to a retiring workforce, active M&A and divestiture environments, and the list goes on. As the governing body of the capital asset lifecycle, fixed asset departments are required to comprehend the impact of these new challenges, while continuing to account for capital spending and fixed asset activity in an operationally efficient manner. The good news is that fixed asset departments are up for the challenge, and with the experienced assistance of RCC, innovative and leading practice solutions can be implemented quickly. Below is a list of challenges that RCC has recently helped customers solve:
Month-End Process Support and Optimization: Wash, Rinse, Dry, Repeat… or rather Run, Reconcile, Remediate, Repeat. Month-end close is always around the corner. Break the cycle of the department-absorbing month-end process by analyzing and resolving root-cause issues that create out of balances, calculation discrepancies and surprises, poor system performance, delayed notifications on critical data updates, and top-side journal entries. In addition, RCC can alleviate your staffing shortages during critical times with expert closing support services.
Plant Closing Backlog Mitigation: Placing construction work-in-progress (CWIP) in-service in a timely manner is perhaps the most significant impact a fixed asset department can have on financial reporting. Ensure that your department has the proper controls, notifications, systems, and processes in place to mitigate any potential closing backlog.
Calculations of Tax Repairs and Other Tax Basis Adjustments: The need for inter-departmental communication between Fixed Asset and Tax departments is at an all-time high. The issuance of the final tangible property repair regulations (for many RCC clients), requires that new solutions are implemented to track new “tax” requirements on capital dollars throughout the entire asset lifecycle. RCC helps ensure that the most long-term value is realized from your tax repairs solution by considering all up-stream and down-stream system and process design implications.
Capitalization Policy Guidance and CPR Alignment: Properly refreshing your company’s capitalization policy guidance to include new technologies and aligning that policy to inventory and property unit catalogs ensures that your entire organization will be speaking the same language when it comes to fixed assets. Furthermore, properly reflecting these changes in your EAM, WMS, GIS, and Asset Accounting systems will mitigate data translation discrepancies further enhancing the effectiveness of integration.
Cost of Removal and Retirement Tracking: RCC ensures that proper systems and controls are in place to accurately account for Cost of Removal (“COR”) and retirements in a timely manner. Subsequently, this helps avoid artificially extending the expected lives of assets during depreciation studies, reserve adequacy discrepancies from regulators, and negatively impacting income and property tax calculations.