Are you confident your fixed asset item is accurately represented in your organization’s year-end financial statements? Organizations face different challenges in performing the inventory of current assets and reconciliation tasks. Time-consuming and manual data collection often reflect on poor controls over the disposal of fixed assets.
RFID, radio frequency identification, is essentially a Tracking software that uses radio waves to identify and inventory existing assets, while automatically reconciling the fixed asset register to the corresponding physical inventory data. Our experience emcompasses over 15 million of asset records reconciled, which allows us to develop custom-made fixed asset inventory software using RFID automated systems to accelerate physical inventory data collection tasks.
What Is a Fixed Asset Register?
A fixed asset register is a comprehensive record or database that contains detailed information about a company’s fixed assets. It serves as a centralized repository of information that includes essential details such as the description, location, acquisition date, cost, depreciation, and current value of each fixed asset. The register helps organizations keep track of their fixed assets, monitor their usage, determine their financial worth, and comply with accounting and reporting requirements.
Fixed Asset Transactions
Fixed asset transactions primarily involve the acquisition and disposal of assets, as well as the allocation of associated costs to specific reporting periods through depreciation expense. When it comes to internal controls over the acquisition of fixed assets, they are generally straightforward and relatively easy to test. Traditional audit procedures have typically placed emphasis on the current-year acquisition of fixed assets and the reporting of the net book value of the overall investment in fixed assets. These procedures often overlook a critical aspect—most organizations tend to have inadequate controls over the disposal of fixed assets.
Despite the existence of sound procedures within an organization, there is often a tendency for equipment to be relocated, transferred, or disposed of without proper documentation. Consequently, it becomes crucial to periodically conduct a fixed asset inventory, followed by a thorough reconciliation of the inventory with the fixed asset accounting records. This process helps ensure that any discrepancies or inconsistencies are identified and addressed promptly. As a result, it is essential to recognize and address this significant gap in the auditing process to ensure comprehensive and accurate financial reporting.
Use Automated Fixed Asset Inventory Software to Grow an Asset Management practice
Utilizing automated fixed asset inventory software can significantly contribute to the expansion and improvement of an asset management practice. This software offers numerous benefits that can enhance efficiency, accuracy, and overall effectiveness in managing and tracking fixed assets.
Streamlined Physical Asset Inventory and Reconciliation Tasks
By implementing automated software, organizations can streamline the process of conducting periodic fixed asset inventories. The software allows for efficient data collection, capturing important details such as asset descriptions, locations, acquisition dates, costs, and depreciation information. This automation reduces the likelihood of errors and ensures comprehensive documentation of fixed assets.
Moreover, the software facilitates easy reconciliation of the fixed asset inventory with the organization’s accounting records. It enables quick identification of discrepancies and inconsistencies, promoting accurate financial reporting.
Integrate With Your Existing ERP System
The use of an ERP-RFID integrated solution significantly facilitates and enhances internal controls over fixed assets. It provides a centralized database for all fixed asset data in real-time, tracking asset movements, transfers, and disposals to seamlessly update ERP asset register. This helps address the common challenge of poor controls over fixed asset disposal, ensuring proper documentation and accountability throughout the asset lifecycle.
Additionally, the software can generate insightful reports and analytics, providing valuable information for strategic decision-making. It enables organizations to optimize asset utilization, identify underutilized assets, and plan for replacements or upgrades more effectively.
Work Order Management and Activity Monitoring
The software can provide proactive monitoring and alerts for disposal-related activities from multiple work orders. It can notify designated individuals when disposals occur, track disposal timelines to ensure they are processed within specified timeframes, and flag any anomalies or exceptions in the disposal process.
Top 5 Ways an Automated Fixed Asset Inventory Software Improves Asset Management
With automated technology like barcodes, RFID and QR codes you are able to track the location of each asset, keep up-to-date equipment and improve administrative workflows. Leading to the following additional benefits:
1. Eliminates ghost assets
Ghost assets, which are assets that appear in a business’s books but are actually stolen, lost, or lack proper documentation, can have a detrimental effect on the bottom line. They contribute to increased fixed costs and occupy valuable space without providing any productivity or value to the organization.
2. Use RFID
RFID automation provides real-time inventory data of all owned assets, which allows organizations to identify ghost assets and take necessary actions. By removing these unproductive assets from the asset repository, businesses can reduce unnecessary costs associated with insurance premiums, maintenance fees, and storage space.
3. Efficient purchase planning
Fixed asset inventory and tracking software assists businesses to effectively manage the entire lifecycle of their assets. It provides insights into asset maintenance schedules, service histories, and replacement needs. This empowers businesses to make informed decisions regarding asset maintenance, repairs, and replacements, ensuring assets remain in optimal condition and operate efficiently over their lifespan.
4. Timely equipment maintenance
Fixed asset inventory and tracking software helps businesses to maintain a complete record of an asset’s history, starting from procurement to disposal. It captures essential details such as acquisition dates, maintenance schedules, service records, and disposal information. This holistic view of asset lifecycle management facilitates effective planning, decision-making, and maintenance activities.
5. Increases Inventory Visibility
Automated software allows for real-time tracking of fixed assets. By utilizing RFID tracking, businesses can monitor the location and status of their assets accurately. This real-time visibility enables organizations to know exactly where their assets are at any given time, improving inventory management and reducing the chances of loss or misplacement.The software maintains accurate and up-to-date asset records.
Every time an asset is scanned or updated in the system, the inventory data is instantly synchronized, ensuring that the information reflects the current status of each asset. This eliminates the reliance on manual or outdated inventory records, providing a more accurate and reliable inventory visibility.
Where to start if you think an Automated Fixed Asset Inventory Software can help you
The most appropriate place to start is to reevaluate your business processes and identify opportunities to implement advanced tracking technologies. The implementation of Fixed Asset Inventory Software using RFID Automation can provide real-time inventory data reconciliation, which in turn enhances fixed asset accounting records.
Our Fixed Asset Inventory solution consisting of RFID Tracking software has assisted Controllers, Property Accountants and Supply Chain to maximize internal controls over disposed assets, while generating higher data visibility for their Asset Management practice.
Contact us today to learn more.