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Red moon top 10 reasons why erp not for tax

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Red moon top 10 reasons why erp not for tax

  1. 1. Reasons why your ERP Fixed Assets Module might not work for tax…
  2. 2. In theory, using your ERP or financialpackage fixed asset subsystem for tax should be your best option.I know. They’ve told you it will work for tax. But will it?
  3. 3. OK…Here are the TOP 10 reasonswhy your ERP fixed assets module might not work for tax! (as shared by your tax colleagues out there)
  4. 4. Think about it…they were built forAccounting and Finance. NOT for tax. In fact, ERP vendors do not have tax technical folks on staff. All tax must be coded in by consultants.
  5. 5. There are and will continue to be tax law changes every year…This will require codingchanges each year.ERP is a mission criticalapplication, IT usuallymakes tax wait to doupdates.
  6. 6. Tax needs an unlimited amount of different book calculations and special calculation needs• Federal Tax (w/bonus depreciation or without)• AMT• ACE• E&P• State Books• Canadian and other Foreign Books• Different calendars (52/53 wk. years, short yr.)• Different basis across books
  7. 7. Tax doesn’t always have access to the ERP to modify asset details • May get audited and need to adjust basis • May need different GAAP to Tax placed in service dates • Current and prior year adjustments • Changes to tax classification • Modify life
  8. 8. Tax sometimes needs to run assets as if they were calculated based on different rules as of their placed in service date Ensure proper“Life to date historical yearcalculations” by year tax treatment
  9. 9. Tax needs to plan! •Take bonus/ “What if” don’t take scenarios bonus… •Retirements• Acquisitions •Splits• Mergers •Cost• Divestitures Segregation •481 Adjustments
  10. 10. Tax has to report single, consolidated, and subconsolidations as well as by business unit, location, etc.Need to be ableto report easilywith any kind of structure and grouping
  11. 11. Tax must see all asset details and history…and report on prior years! Most ERP’s roll forward year to year and prior depreciationexpense becomes accumulated
  12. 12. Tax needs to reconcile from book to tax! Ease is essential.  Not offline or by using Excel  One click reconciliation reporting
  13. 13. Tax needs forms and many reports!Easy, quick and able to export to Excel. Reconciliation Roll forward Transactions Depreciation Tax Reports State Reports Bonus Depreciation Reports Audit Reports And on…and on…and on…
  14. 14. Don’t think you don’t have an alternative solution! • Take a serious look at your options • Don’t just take people’s word for it • Investigate further… Do your homework! • Other tax professionals will share their experiences! • Don’t “sell” the tax department short. • There are third party solutions that can make your life sooo much easier!
  15. 15. Thank you for reading!For more information, contact me at: Kelley Lear 941-379-7108