RFID Technology and automation have been transforming fixed asset management for years. Embracing current technologies can ensure accurate fixed asset accounting records and drive your accounting control, whilst freeing up valuable resources and allowing your organization to scale efficiently.
But what does Fixed Asset Tracking automation really mean for accounting, and how do you get the most value from your accounting tools? The future of financial transformation is happening now. Finance teams should focus on moving away from traditional processes and manual tasks, instead focusing on value-adding advisory work. This is where the RFID system and software is key.
Fixed asset management plays a crucial role in ensuring the efficient tracking and financial reporting of assets and depreciation for organizations. In recent years, the advent of RFID (Radio Frequency Identification) technology has revolutionized the way fixed asset tracking is performed. By automating the process and providing real-time data visibility, RFID systems have become an indispensable tool for effective fixed asset management.
In this article, we will explore the concept of fixed asset tracking automation, define what a fixed asset tracking system entails, provide an example of fixed asset tracking, and discuss how to automate the fixed asset management process.
What is Fixed Asset Tracking automation?
Fixed asset tracking automation refers to the use of technology to streamline and digitize the process of tracking and managing fixed assets within an organization. This automation eliminates the need for manual data entry, paper-based records, and labor-intensive tracking methods, resulting in increased accuracy, efficiency, and data visibility.
What is a Fixed Asset Tracking system?
A fixed asset tracking system is a comprehensive software solution combined with hardware components, such as RFID tags and scanners, designed to monitor and manage fixed assets throughout their lifecycle. This system enables organizations to efficiently track, locate, and record vital information about each asset, including its location, condition, maintenance history, and depreciation.
What is an example of fixed asset tracking?
Let’s consider an example of a manufacturing company that utilizes fixed asset tracking to streamline its operations. The company implements an RFID-based fixed asset tracking system that assigns unique RFID tags to each asset, such as machinery, equipment, and vehicles. These tags are affixed to the assets, allowing them to be easily identified and tracked using RFID scanners. As a result, the company can quickly locate assets, monitor their usage, schedule maintenance, and generate accurate reports on asset utilization and depreciation.
How do you automate the fixed asset management process?
To automate the fixed asset management process, organizations can follow these steps:
Implement RFID technology
Introduce RFID tags and scanners to label and identify fixed assets. RFID tags can be attached to assets, enabling automatic data capture and real-time asset tracking.
Deploy a fixed asset tracking system
Invest in a robust fixed asset tracking software that integrates with RFID technology. This system should provide features like asset registration, check-in/check-out, maintenance scheduling, and reporting capabilities.
Establish centralized asset database
Create a centralized database to store all asset-related information, including asset details, location, maintenance records, and depreciation data. This ensures data integrity and accessibility across the organization.
Conduct initial asset inventory
Perform a thorough inventory of all fixed assets, scanning and recording each asset’s details using RFID scanners. This step helps establish a baseline for asset management and ensures accurate data entry.
Develop standardized workflows and procedures for asset acquisition, allocation, maintenance, and disposal. Automate these processes within the fixed asset tracking system to reduce manual effort and enhance efficiency.
Enable real-time asset tracking
Leverage the power of RFID technology to track assets in real-time. This allows for immediate identification of asset locations, facilitates quick audits, and minimizes the risk of loss or theft.
Generate comprehensive audit reports
Utilize the reporting capabilities of the fixed asset tracking system to generate insightful reports on asset utilization, maintenance history, and depreciation. These reports aid in decision-making, budgeting, and compliance with regulatory requirements.
What does Fixed Asset Tracking mean for internal accounting control?
Fixed Asset Tracking automation with RFID Systems assists finance teams and organizations to ensure that asset accounting records are up to date and reliable, while freeing up valuable resources (manual data collection and labor resources) and allowing your organization to scale efficiently.
Accurate and Real-time Data
RFID Systems automate the tracking of fixed assets, providing accurate and real-time data on asset location, status, and usage. Reducing errors and improving financial reporting accuracy.
Streamlined Asset Management
RFID Systems automate various asset management processes, such as asset acquisition, depreciation, maintenance, and disposal. By integrating these processes with accounting tools, organizations can streamline workflows, reduce manual effort, and ensure compliance with accounting standards and regulations.
Improved Asset Visibility and Control
RFID Systems enhance asset visibility by enabling organizations to track assets throughout their lifecycle. This visibility helps accounting departments maintain an accurate inventory, identify missing or lost assets, and prevent unauthorized transfers or disposals, improving internal controls and reducing the risk of asset mismanagement.
Efficient Audit and Reporting
With RFID Systems, accounting departments can conduct asset audits more efficiently. The automated tracking and data capture capabilities enable quick and accurate reconciliation of physical assets with accounting records, simplifying the audit process. Moreover, RFID-generated data can be leveraged to generate comprehensive reports on asset utilization, depreciation, maintenance costs, and compliance, providing valuable insights for financial analysis and decision-making.
To maximize the value from accounting tools in conjunction with Fixed Asset Tracking automation with RFID Systems, consider the following:
Ensure that the RFID system seamlessly integrates with the organization’s accounting software or ERP system. This integration allows for the automatic transfer of asset data between the systems, eliminating the need for manual data entry and reducing the risk of errors.
Data Accuracy and Consistency
Establish standard procedures for RFID tagging, data entry, and asset information maintenance. Regularly validate the accuracy and consistency of asset data captured by the RFID system with accounting records, ensuring that the two align and discrepancies are promptly resolved.
Data Analytics and Decision Support
Leverage the data collected by the RFID system and accounting tools to perform data analytics and gain insights into asset performance, cost optimization, and strategic decision-making. Use the integrated system’s reporting capabilities to generate customized reports that align with the organization’s financial objectives and requirements.
By harnessing the power of Fixed Asset Tracking automation with RFID Systems and effectively integrating them with accounting tools, organizations can improve financial control, enhance operational efficiency, and gain valuable insights for informed decision-making in their asset management and accounting processes.
Where to start if you think RFID can help
The most appropriate place to start is to reevaluate those business processes and internal controls you wish could be automated. For instance, one may choose to streamline Fixed Asset Tracking and Audit tasks with the implementation of RFID Systems.
By integrating RFIDs with ERP Systems, firms eliminate manual data entry, individual scanning, data verification (reconciliation), and asset searching. As well as creating real-time visibility for Asset Tracking and Management operations.
CPCON’s AI tool simplifies the fixed asset reconciliation processes by automating the matching and linking the physical inventory data with the corresponding asset accounting records, based off similarity testing of the database. Resulting in 10x faster cleansing and improved analysis of residual assets – including, but not limited to unrecorded retirements, unrecorded additions, and other matches.
Our Fixed Asset Advisory team has deep experience in reviewing and establishing asset capitalization policies for financial reporting, tax, insurance, and regulatory compliance. We can guide you through the accounting process.
CPCON has vast experience in guiding firms to business processes solutions and advanced RFID technology. So let us help you get started today.