What was the net internal-use software value for Expense Reduction Analysts in 2023?

According to Expense Reduction Analysts' 2025 Franchise Disclosure Document, software development costs of $35,430 were capitalized and included in internal-use software on the balance sheets for the year ended December 31, 2023. The asset was being developed in 2022 and therefore was not depreciated until 2023 when it was put in use. Depreciation expense of $6,832 was charged to operations in the year ending December 31, 2023.

For a prospective Expense Reduction Analysts franchisee, understanding how the company accounts for its internal-use software can provide insight into its technology investments and expense management. The capitalization of software development costs suggests a commitment to developing proprietary tools, which could offer a competitive advantage.

The depreciation expense indicates the ongoing cost of using these software assets. The net internal-use software value would be the capitalized cost less accumulated depreciation. In this case, the capitalized cost was $35,430 and the depreciation expense was $6,832, resulting in a net value of $28,598. This figure represents the book value of the software on Expense Reduction Analysts' balance sheet at the end of 2023.

It's important to note that this accounting treatment can impact the company's reported profits, as capitalization defers the expense recognition over the useful life of the software (10 years), rather than expensing it immediately. Franchisees may want to inquire about the specific software used and its impact on their operations.