An asset management solution that will track assets by location, calculate monthly fixed asset transaction records, allow the acquisition of new assets through the purchasing process (ie, supply chain management), eliminate the duplication of work and produce meaningful management reports, is intended to satisfy the business needs of an organization and remove the need for complex spreadsheets that can easily be misplaced or lost.
If implemented correctly, an asset tagging solution should enable the organization to:
- Save time and money; Reduce theft and losses;
- Prevent the over-payment of depreciation taxes and insurance;
- Reduce the risk of regulatory non-compliance with legislation such as IFRS;
- Improve planning and budgeting functions;
- Establish an accurate baseline of fixed assets;
- Eliminate ‘ghost' assets;
- Provide an interface with a bar code scanner and thus enable the printing of labels with bar codes;
- Add new assets on the fly and update any asset status and location;
- Track asset assignment and returns with an employee;
- Schedule asset assignment to the responsible parties; and
- Integrate capex purchases via the accounts payable facility to the assets register.
When choosing the best asset tagging software solution for their your company or organization, among the tools to consider for total control of the asset life cycle are fixed asset accounting software, inventory solutions, custom reporting and project accounting solutions. In evaluating software solutions, particular attention should be paid to the integration between fixed asset applications as well as with other financial solutions, such as the general ledger, in order to save additional time and eliminate the possibility of data re-entry errors.
With the appropriate software solution in place, asset managers can efficiently track, manage and report on fixed assets throughout their useful lives and their ultimate removal from service. When this form of fixed asset management is implemented, it is possible to ensure the efficient use of the assets currently owned and enable better planning for the assets and organization needs. The following are the steps needed to create this:
Establish an accurate baseline of fixed assets - A physical inventory of the company's fixed assets is essential to eliminate ‘ghost' assets and verify and validate your assets register. Without it, no amount of added processes, controls or calculations can ensure the accuracy of your fixed asset accounting.
Select the right tool for the job - Select the right labels/tags for the type of asset and tag assets appropriately. Once the decision is made to identify fixed assets using bar code labels, the inventory process will benefit from the speed and efficiency gained through the use of bar code scanning devices. Hardware should be selected to meet the needs of your business from the many types of handheld devices available. In addition to traditional bar code scanners, a variety of PDAs and Pocket PCs also support bar code scanning. Each type of bar code hardware has distinct advantages.
Dedicated bar code scanners are extremely durable, reliable and efficient as they scan faster and with greater accuracy than any other type of hardware. PDAs and Pocket PC devices are less costly and can be used for a variety of functions. These multi-use devices also support e-mail, address books, notepads and other personal applications in addition to bar code scanning and inventory software. The choice of the hardware that is effective for your business based on the number of fixed assets to be tracked; the number of asset counts conducted annually; the conditions under which asset counts are conducted; other uses you may expect from the bar code scanner devices; and the available hardware budget;
Rely on accurate depreciation calculations - Move away from error prone spreadsheets and select a fixed asset software solution to perform your depreciation calculations and one that is integrated with internal controls and audit trails built in.
The fixed asset software should integrate to your accounting system's general ledger and accounts payable modules to eliminate duplicate capture, minimize errors and to streamline your processes. If the company has many locations, fixed asset software should be selected that allows for concurrent asset counts, while centralizing the results. Other factors to consider should be reporting requirements, division of duties, and the ability to group assets and assign them to the responsible member, as well as a facility to check-in and out mobile assets with an audit history trail to prevent theft or losses.
Stay up to date with legislative changes - As fixed assets represent a significant investment for most companies, mistakes in depreciation and tax calculations can have negative consequences such as failure to comply with legislature requirements and financial reporting errors. This can result in the over-payment of insurance and the incorrect payment of taxes that can result in penalties. Ensure the software solution that is purchased has flexible and accurate depreciation calculation methods that take maximum advantage of depreciation periods, thus resulting in maximum savings. Select a fixed asset management application company that continually updates its software to accommodate legislative changes and ensure the updates are included in your maintenance plan.
Produce targeted financial reports - Accurate fixed asset management reports provide financial managers with insight for tax planning, efficient asset allocation and use, as well as future asset acquisitions. Fixed asset software should have the facility to create tailored financial reports to suit the company's requirements via a custom report writer solution. The majority of fixed asset software will ship with standard reports for depreciation and assets details.
Select software that is scalable - When selecting a fixed asset management application, ensure the software will be suitable for the current situation and be able to accommodate future growth. The fixed asset software that you select should allow for additional modules or services to be purchased that will enhance your solution in the future or when the need arises.
Undergo training on the system that is employed - In order to leverage the most out of your fixed asset software, you need to ensure you are trained on the features and functions of the program and proficient with all required tasks to get the most benefit. Fixed asset software is designed to tack and manage assets while saving time and reducing errors, and adequate training will ensure that this is achieved.
Asset tracking - In a competitive world, many businesses will use whatever means necessary in order to compete in the marketplace, and the utilization of bar code scanners will significantly help in this regard. The following are some of the benefits of utilising bar codes:
Increased efficiencies - With minimal effort and recourses, the scanning of a bar coded asset supersedes having to physically log everything in by hand, as the bar code contains all the information that is required as the process transfers the asset record to the fixed assets register and thus minimizing human error.
Smoother internal operations - There is always a system of checks and balances internally and externally for every business to ensure that rules are correctly followed; IFRS compliancy is an external example.
- The automation of depreciation and tax calculations;
- The integration to the accounting package, which minimises the amount of manual intervention required; and
- Flexible online reporting and analysis that will automate the production of management reporting.
For further information, please contact