Download - Red moon top 10 reasons why erp not for tax
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Reasons why your ERP Fixed Assets Module might not work for tax…
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In theory, using your ERP or financial package fixed asset subsystem for tax
should be your best option.
I know. They’ve told you it will work for tax.
But will it?
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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)
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Think about it…they were built for Accounting and Finance. NOT for
tax.
#1
In fact, ERP vendors do not have tax technical folks on staff.
All tax must be coded in by consultants.
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There are and will continue to be tax law changes every year…
#2
This will require coding changes each year.
ERP is a mission critical application, IT usually makes tax wait to do updates.
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Tax needs an unlimited amount of different book calculations and
special calculation needs
#3
• 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
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Tax doesn’t always have access to the ERP to modify asset details
#4
• 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
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Tax sometimes needs to run assets as if they were calculated based on different rules as of their placed in
service date
#5
“Life to date calculations”
Ensure proper historical year by year tax treatment
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Tax needs to plan!
#6
“What if” scenarios
•Take bonus/ don’t take bonus…
•Retirements•Splits•Cost Segregation
•481 Adjustments
• Acquisitions• Mergers• Divestitures
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Tax has to report single, consolidated, and subconsolidations as well as by
business unit, location, etc.
#7
Need to be able to report easily with any kind of structure and
grouping
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Tax must see all asset details and history…and report on prior years!
#8
Most ERP’s roll forward year to year and prior depreciation
expense becomes accumulated
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Tax needs to reconcile from book to tax! Ease is essential.
#9
Not offline or by using Excel
One click reconciliation reporting
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Tax needs forms and many reports! Easy, quick and able to export to Excel.
#10
Reconciliation Roll forward Transactions Depreciation Tax Reports State Reports Bonus Depreciation Reports Audit Reports And on…and on…and on…
One click reconciliation reporting
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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!
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Thank you for reading!For more information, contact me at:
Kelley [email protected]
941-379-7108
www.redmoonsolutions.comblog.redmoonsolutions.com
www.twitter.com/redmoonsolution