February 05, 2015
CMMS and Tax Season
As we put the first month of the year firmly behind us, there is a magical feeling in the air. No, that isn't the sting of Cupid"s arrow you are feeling: It is the heavy, bludgeoning blow of Uncle Sam"s tax stick, preparing to whack you firmly on the skull. With the tax season in full swing and the tax man making his yearly rounds, it is well past time to get your paperwork in order. If you got a slow start or are lacking in the time department, you may be in luck; a CMMS might be able to lend you a hand!
When most of us in the reliability industry think about computer maintenance management system (CMMS), or facility management software, we tend to think of it only in terms of how it can help keep our machinery up and running or track problems on our properties. However, there is a built-in, readily available aspect of CMMS that moves them beyond just your typical asset management tool.
Maintenance systems are great for tracking things: assets, work orders, parts, and even financial data. Because of that, they make ideal tools to help gather important tax documentation to provide to your CPA (certified public accountant) or tax professional. For instance, since part of the role of a CMMS is to issue work orders and keep track of what work was performed, how long each job took, and so forth, you should be able to readily print a list of all employees in your department, how many billable hours they worked, and more. In addition, you may also employ contractors or freelancers, who have their own unique tax requirements. Your maintenance software will keep track of the work performed by these types of employees as well.
Another way your CMMS can help during tax season is by keeping track of the various assets you order to keep your equipment and facility in tip-top shape, like spare parts you need for repairs. Even the equipment you service needs to be tracked as part of your operating expenses. Likewise, if your boiler breaks down or your roof needs repairing, these are all important things to note on your taxes, as they could help reduce your tax liability.
Your company"s accountant will also need to document operating costs and calculate any profits (or losses) to report to the IRS, so it is crucial to have meticulous notes about every expenditure, be it man-hours or physical equipment, as well as any information that will help determine if your department is operating at a profit or a loss. A good CMMS can perform this reporting function as well.
One important, yet often-overlooked, area that a maintenance system helps a business with (and therefore is helpful in the tax department) is energy efficiency. By tracking energy usage and energy waste, you can take steps to employ the use of energy-friendly or energy-saving machinery. This will help reduce overall utility costs and may make your company eligible for tax credits.
The above is just a short list of ways your computerized maintenance management system can help during the tax season. So when the tax bill comes in, be sure to thank your CMMS (and your accountant) for helping to reduce your tax bill!