As a world renowned manufacturer, managing an extensive fixed asset register was difficult and time consuming for our client.
After becoming concerned with its accuracy, reliability and compliance, RSM was engaged to perform a comprehensive data audit to identify anomalies and deliver recommendations for remediation.
Using Alteryx, a data analytics tool we had in common with the client, our team developed a series of purpose-built workflows and tests to prepare the data along with visual dashboards to support analysis. These allowed for a full investigation into all errors, and the delivery of an updated and accurate fixed asset register with systematic improvements to streamline the process into the future.
Siloed data and manual interventions had led to discrepancies and miscalculations
For a leading multinational food and beverage manufacturer, maintaining an accurate fixed asset register is extremely important. The register not only enables the tracking of assets (from production equipment and vehicles through to office devices), but is an essential aspect of tax compliance to support depreciation claims.
Our client had traditionally maintained a fixed asset register through their Enterprise Resource Planning (ERP) software, but had recently moved to a new ERP leading to data inconsistencies and duplication. The ability for staff to manually update the register, and a need for manual reconciliations, had also left our client’s leadership with concerns about the accuracy of their data.
In addition, there were significant concerns about the categorisation of assets compared to the Australian Tax Office (ATO) asset depreciation schedule – potentially resulting in inaccurate depreciation calculations dating back several years.
After conducting a manual internal review, our client sought a data driven and complete audit which led them to reach out to RSM.
Our client’s objective was to run a comprehensive data analytics exercise to:
- understand the efficacy of all fixed asset register data
- identify anomalies and duplication
- validate asset categorisation
- scrutinise depreciation calculations
As part of the process, they also sought to enable process improvements that would boost data confidence and provide a systematic and scalable approach to fixed asset register analytics in the future.
Developing workflows and dashboards to investigate anomalies
RSM’s data and analytics team worked closely with our client to ascertain the full scope of fixed assets across the business.
Our client had already invested in quality data and analytics tools (including Alteryx and Power BI) but hadn’t had the internal capacity to fully leverage their capability.
Being highly familiar with these tools, our first step was to design workflows in Alteryx to:
- cleanse and process the data
- join and combine multiple data sources for holistic analysis
- run pre-defined analytical tests based on specific logic
Some of the analytical tests included comparing data between the accounting and tax asset registers, validating asset movements, contrasting data on the effective life of an asset with ATO guidelines, recalculating depreciation amounts, and testing general ledger transactions.
We then developed Power BI dashboards to serve up the data in a visual and interactive format, with the ability to drill down to asset level details to facilitate deeper analysis.
The second stage of the process was to investigate anomalies and create an updated and accurate fixed asset register. With the system now engineered to provide a fully auditable data trail, our client was able to see and track any data changes (including when and by whom) to support assurance.
As part of the process, we also explored opportunities to automate data matching of asset categories to the ATO’s regularly updated asset depreciation schedule, to save our client time and reduce the potential for human error.
An optimised fixed asset register, with timely data for decision making
On completion of the project, RSM’s data and analytics team was able to provide a comprehensive breakdown of fixed asset register errors and how these had been resolved.
Correct depreciation calculations were applied to each asset in each year, allowing our client to make necessary changes to reconcile their data and adjust ATO submissions for tax purposes.
Having established practical workflows and dashboards for testing and analysis, our client’s internal team is now well equipped to:
- view real time data on fixed assets
- drill down to investigate anomalies
- run trusted reports to support decision making
- have clear oversight on depreciation calculations and asset activity
Auditable data trails now ensure that any data that is manually changed can be tracked, while built in anomaly detection automatically alerts stakeholders to any data discrepancies.
Moving forward, our client was so pleased with the results that RSM’s data and analytics team have been engaged to conduct a similar exercise to support our client’s overseas operations.
FOR MORE INFORMATION
If you would like to learn more about the topics discussed in this article, please contact your local RSM office.