ATR : Acquire to Retire

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    Overview

    Acquire to Retire (ATR) can be defined as the business process of acquiring or obtaining a product, asset, equipment, or service to be used by an organization or business, and then discarding or disposing it when it is no longer required, or at the end of the product or services’ usable lifespan. This typically includes asset management-related actions like sourcing, installation, commissioning, maintenance and repair, overhaul, decommissioning, and disposition. ATR in SAP is a critical element of an organization’s supply chain process framework and should always be managed efficiently and cost-effectively. 

    The main goal and objective of the acquire to retire process in SAP is to make sure that the product or services needed are acquired at the best possible price from the organization’s perspective. They should also be value-for-money and meet organizational objectives. Through careful planning and execution of the ATR process in SAP, companies can save time, money, and resources, while increasing efficiency and minimizing environmental impact.

    How does SAP Acquire to Retire work?

    The key steps and SOPs in the acquire to retire cycle in SAP can be laid down below:

    1)Asset Acquisition: 

    • Create a Purchase Requisition (PR) or a Purchase Order (PO) to initiate the process of acquiring an asset.
    • Document the Goods Receipt (GR) when the asset is received.
    • Verify the vendor’s invoice as a precursor to settling the invoice amount.

    2)Asset Capitalization: Capitalizing the asset, i.e., recording the asset’s cost and adding it to the balance sheet as an asset value.

    3)Asset Depreciation: 

    • Calculate and post regular depreciation estimates for the asset over its useful lifespan. 
    • Use different depreciation methods (i.e., straight-line, declining balance, etc.) in conformity with the organization’s accounting policies.

    4)Asset Transactions:

    • Record asset transfers between cost centers, and office/business locations.
    • Record asset scrapping or asset retirement when the particular assets are no longer in use and are being disposed of.

    5)Asset Maintenance:

    • Monitor and manage routine maintenance and repairs performed on assets.
    • Record and factor in maintenance costs.

    6)Asset Disposal:

    • Start and manage the asset disposal process, at the end of its lifespan.
    • Remove disposed asset entries from the balance sheet.

    7)Asset Reporting:

    • Generate reports to track and manage asset status, depreciation, and overall asset portfolio performance.

    The diagram below provides a glimpse of the various steps involved in a typical acquire to retire process in SAP:

    ATR : Acquire to Retire

    What are the best practices in the implementation of the ATR cycle in SAP?

    The following are the key considerations and best practices to be adopted during the implementation of the ATR in SAP:

    1)Data Management: Ensure accurate, regularly updated, and complete data on assets, including asset description, cost, useful lifespan, and the depreciation methods used to calculate value.

    2)Integration: ATR in SAP needs to be always well-integrated and aligned with other key SAP modules, like Finance (FI) and Controlling (CO), to ensure accuracy in financial reporting.

    3)User Training: Users have to regularly undergo complete training to make sure that they understand the process of asset-related data entry correctly and perform transactions in the ATR process in SAP.

    4) Internal Controls: Necessary internal controls have to be implemented at all times to prevent errors and fraud during the asset acquisition, depreciation, and disposal process.

    5)Regulatory Compliance: Relevant accounting standards have to be complied with, as also the statutory legal requirements for asset management and financial reporting have to be met.

    6) Master Data Governance: Time-tested master data governance processes have to be established to maintain and manage data quality and consistency throughout the asset’s lifecycle.

    7)Asset Tracking: Implementing a foolproof system or process to track physical asset locations, usage, and maintenance history, which can always be a readily available source of reference.

    8)Testing and Validation: Thoroughly test the acquire to retire process in SAP to identify and resolve any issues before the system goes live.

    9)Data Migration: During a legacy system migration, plan and execute data migration carefully to ensure data accuracy in the ATR cycle in SAP.

    10) Continuous Improvement: Monitor, track, and evaluate the asset management process in real-time to stay agile and identify areas for continuous improvement and optimization.

    How will BPX help implement the acquire to retire cycle in SAP?

    The acquire to retire process in SAP constitutes the entire lifecycle of fixed assets management, from the time the assets are acquired to their eventual retirement. The ATR process in SAP consists of various steps and processes to effectively track and manage assets throughout their useful life or tenure within the organization or business.

    BPX can help you to successfully plan, tailor and execute your SAP acquire to retire process roadmap. Implementing the acquire to retire cycle in SAP consists of several stages, from understanding the existing “As-Is” process to supporting the SAP ATR system after Go-Live. These key steps can be explained below:

    1. As-Is Process (Current State, including the list of procedures):

    In this stage, the organization analyses its current asset management processes to understand how assets are acquired, capitalized, depreciated, maintained, and retired. The ‘As-Is process’ involves recording the current procedures, SOPs and identifying pain points and areas for improvement. This may include:

    • Asset Acquisition: How assets are requested, ordered, and received.
    • Asset Capitalization: How asset costs are documented and added to the balance sheet.
    • Asset Depreciation: How depreciation is calculated and posted, including the depreciation method(s) used.
    • Asset Transactions: How asset transfers, disposal & scrapping, and retirement are processed.
    • Asset Maintenance: How maintenance activities are managed and monitored.
    1. Business Blueprint (Fit-Gap & To-Be):

    Based on the ‘As-Is’ process, the business defines its ‘To-Be’ framework, which constitutes the desired state of the ATR process in SAP. The business roadmap drawn up here consists of identifying gaps between the ‘As-Is’ and the ‘To-Be’ processes and defining solutions to plug those gaps. The ‘Fit-Gap’ analysis thus helps determine what standard SAP functionalities can meet the requirements, and also where customized solutions are required.

    1. Master Data Migration/ Item Master Configuration:

    In this stage, the organization gets ready for the data migration process or the initial asset master data setup to be initiated in the acquire to retire cycle in SAP. This involves the creation and configuration of asset master records, including information such as asset description, location, useful lifespan, depreciation methods used, etc. Existing asset data from legacy systems may need to be cleaned and transformed for the SAP migration to begin.

    1. System Configuration / Realization (as per To-Be) along with customization:

    This involves configuring the ATR cycle in SAP to match the defined ‘To-Be’ processes. Standard SAP functionalities are activated and customized to meet specific business requirements determined during the business blueprint phase. Configuration here includes the establishment of asset accounting, depreciation methodologies, asset classes, and other relevant settings.

    1. UAT (User Acceptance Testing):

    During the User Acceptance Testing phase, end-users test the configured ATR in SAP to ensure that it fulfills the defined business requirements and functionalities correctly. Feedback and issues that crop up during this time, are documented and addressed by the project team. UAT helps to identify any gaps or divergences in the system’s performance before the crucial Go-Live stage.

    1. Go-Live Preparations (update as per feedback during UAT):

    Based on the UAT feedback and final modifications, the system is prepared for Go-Live. Data migration is completed, and the end-users undergo their final training to ensure they are ready to operate the system effectively.

    1. Go-Live:

    The Go-Live stage involves the formal launch of the SAP acquire to retire system for asset management. At this juncture, the organization starts using the SAP ATR processes to handle asset acquisition, capitalization, depreciation, and other relevant transactions and activities in real time.

    1. After Go-Live Support:

    After the successful Go-Live, the project team and support staff provide continuous, ongoing assistance to end-users in real time. They address any post-implementation issues, challenges, or bottlenecks, answer queries, and refine the ATR cycle in SAP to ensure smooth, unhindered functioning and operations.

    Through the implementation of the acquire to retire cycle in SAP, effective communication, training, and organizational change management (OCM) are vital factors to ensure the successful adaptation of the new SAP ATR system.

    The execution and implementation of the Acquire to Retire process in SAP differs based on specific business requirements. It is therefore key to work in sync with leading SAP process consultants like BPX, SMEs, and key stakeholders to customize, execute and streamline the entire process in keeping with the organization’s unique needs, as also effectively address its pain points, issues, and challenges.

    Logistics Execution (LE) - How will BPX help Implement

    What is BPX all about?

    Based out of Pune India, Business Process Experts (BPX) is a key enabler in the process management space, a specialist in providing unique, customized SAP acquire to retire process solutions. With offices in UAE and other prominent Indian cities, the company was established more than a decade back in 2012. Since then, it has made giant strides and grown steadily to become a market leader in the SAP ATR process solutions landscape. 

    Led by a professional team of engineers, management and finance experts, SAP consultants and problem solvers, BPX and its well-known sister concern like YRC are now key strategic, transformational partners for leading clients. BPX clientele belongs to key industrial sectors like engineering, automobiles, banks, chemicals, garments and apparel, retail & hospitality, manufacturing, pharmaceuticals, mining, and ITeS.

    As your trusted SAP ATR process consulting partner, BPX will thoroughly study your organization’s ATR cycle in SAP and customize the entire process roadmap, all aligned and mapped to your specific business needs. Thus, our SAP business process experts will guide you every step of the way to ensure tangible cost savings and optimal resource utilization.

    If you happen to be a decision maker or a senior leader looking to implement your very own SAP acquire to retire journey, your search ends here, please connect with BPX now. We will first understand your strategic needs and help you to tap into the various benefits of ATR in SAP, unlocking great value and realizing your true business potential, to craft your very own success story!

    FAQs

    The term Acquire to retire (ATR) is generally used to define the entire end-to-end lifecycle of the management of fixed assets in an organization or business.  The ATR process starts right from the acquisition or creation of fixed assets, till the final disposal and retirement of these fixed assets by the organization, after the completion of their usable or valuable lifetime or tenure. The ATR process in SAP includes the various steps and processes used to effectively monitor and manage assets throughout their useful life or tenure.

    The various steps in the acquire to retire cycle in SAP can be enumerated below:

    1. Asset acquisition
    2. Master data creation
    3. Asset management
    4. Asset depreciation
    5. Asset transfers
    6. Asset scrapping, retirement, or disposal
    7. Asset reporting (asset usage, depreciation, maintenance costs, and other information)

    The key benefits or advantages of implementing the acquire to retire (ATR) process in SAP are as follows:

    1. Centralized asset monitoring, ensuring greater visibility
    2. Enhanced operational efficiency due to streamlined asset management
    3. Greater financial control and transparency
    4. Optimal asset utilisation
    5. Improved asset maintenance and tracking
    6. Efficient asset transfers
    7. Accurate asset depreciation assessment
    8. Reliable financial reporting and analytics on key asset metrics
    9. Integrated procurement and finance functions
    10. Greater compliance and clean audit trails
    11. Reduction of costs in the asset management system

    Though having common elements, Procure to Pay (PTP) and Acquire to Retire (ATR) are essentially two diverse process solutions in SAP, impacting different facets of an organization’s asset management framework. Representing different stages of the asset management life cycle, the objective of procure to pay (PTP) in SAP is to manage and regulate the purchase and procurement process, as also vendor-based transactions. On the other hand, acquire to retire (ATR) focuses on managing an organization’s fixed assets throughout its entire usable lifespan or tenure. Both PTP and ATR in SAP play crucial roles in an organization’s overall asset-related operations. Proper integration of the two processes thus becomes necessary to facilitate seamless, streamlined, and transparent financial compliance, accounting standards, and operations, as also complete transparency in the entire asset management ecosystem.

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