General Growth Properties Switches to Fixed Assets for Greater Control, Efficiency, and Accuracy
Minimize the risks from manually managing fixed assets. Goals to achieve:
- Minimize the labor, opportunity costs, and higher level risk of manually managing 185,000 fixed assets
- Reduce inaccuracies in fixed assets data, depreciation, and ultimately reporting
- Increase the standardization of asset categorization and policy enforcement
Bloomberg Tax Technology Fixed Assets
Increased accuracy, efficiency, and control in the management of fixed assets. Strategic impact:
- Able to reassign department personnel to tasks like analysis functions, which add value to meeting company financial goals
- Able to maintain a high-level of confidence in the accuracy and consistency of data.
- Able to spend more time on tax planning, including for multiple years, and less time on tax compliance.
- Able to rapidly adjust plans and projections when there are changes to the tax law and accounting standards
Headquartered in Chicago, Illinois, General Growth Properties, Inc. (GGP) is an S&P 500 company focused exclusively on owning, managing, leasing, and redeveloping high-quality retail properties throughout the United States. GGP’s corporate tax department was tasked with managing the fixed assets of 127 regional malls in 40 states. There were far too many assets for GGP to accurately handle manually but this was the operational reality in which they found themselves.
Software Deficiencies Create Additional Work
GGP is an asset-intensive company with over $23 million in net property and equipment and only had the eleven members of the corporate tax department to manage 185,000 assets. With multiple, non-integrated systems being used by GGP to manage book and tax for fixed assets, the tax department has to manually input assets, costs, and other data for tax purposes. Their incredibly manual and labor intensive task created the potential for costly errors and left little time for analyzing the data or comparing tax scenarios. What’s more, the existing fixed assets software lacked future-years projection capabilities, requiring still further manual efforts for the tax department when it came to planning.
Ryan Kaufman, director of taxation at GGP, described his team’s asset management complications, saying, “Nearly every aspect of managing fixed assets was manual for us for two reasons: one, we had multiple systems that weren’t integrated; and two, our previous fixed asset software didn’t correctly calculate depreciation.”
Kaufman knew it was time to take action. He and his staff set out to identify a solution that would consolidate all their information for tax purposes onto one platform and automate the process of pulling asset data from the company’s JD Edwards general ledger system. The goal was to improve the reliability and accuracy of the data while making the asset management process significantly more efficient.
Fixed Assets Beats the Competition
After evaluating several software packages, GGP chose Fixed Assets™ from Bloomberg Tax. “Fixed Assets was far superior to the other solutions we looked at,” says Kaufman. “It offers great flexibility, tons of options, built-in reports, and greatly reduces manual efforts and the risk of costly errors.”
With the help of a dedicated professional services specialist from Bloomberg Tax, Kaufman and his team had a complication-free deployment of the new Fixed Assets system; “The implementation specialist who helped us convert our data and deploy Fixed Assets was an incredible resource and still continues to be. The conversion and go-live went smoothly and we were able to reconcile our data easily.”
Greater Accuracy Brings Peace of Mind
With the Fixed Assets solution automating fixed assets management the tax department’s efforts have literally been transformed. Now, fixed asset management is highly efficient, with little to no manual efforts required to achieve far greater accuracy and control. “Consolidated reporting is fast. Running projections is easy. Assets can be added or disposed of very quickly,” says Kaufman. “ Fixed Assets has been invaluable in a variety of ways, but the greatest thing is the peace of mind that it gives us, knowing that the calculations are correct.”
Kaufman also appreciates the flexibility of Fixed Assets, especially given the frequent changes to GGP’s structure: “ Fixed Assets gives us the ability to manipulate our rollups or consolidations very quickly, despite changes to the structure.”
Automation Improves Control and Standardization
Fixed Assets also enabled GGP’s tax department to eliminate disparities and standardize the asset management process. GGP’s capital accounting group inputs assets from invoices into the general ledger system for book accounting. “ Fixed Assets helps us standardize the application of tax policy across all assets and asset categories,” explains Kaufman. “Now there are no disparities in life or method based on what one person thinks versus someone else.”
Built-in Compliance Eases Implementation of Regulatory Changes
Kaufman believes that Fixed Assets has enabled him and his team to respond more rapidly and advantageously to tax law changes. “Whether it’s the final tangible property regulations or a change to bonus depreciation, Fixed Assets gives us the ability to plan and anticipate how the change could potentially impact our tax position,” says Kaufman. “Compliance with frequently changing regulations is built right into Fixed Assets, making it easy for us to plan and adapt.”