Fixed Assets Management is very crucial to any organization interns of financial health and operational efficiency. The safety and monitoring of all fixed assets should be established by the Management of the organization. Mismanagement of fixed asset can become matter of concern during financial audits and may impair the organization's credibility with banks and investors.
Why Fixed Asset Management is Important?
From our past execution of our related services, we have come across with many issues due to improper fixed asset management. Some of the common issues include:
- Inaccurate asset valuations leading to financial reporting errors as mostly fixed assets represent a significant portion of an organization's balance sheet. This affects the organization’s ability to properly assess its financial health, impacting budgeting, forecasting, and compliance with financial regulations.
- Lack of development and maintenance of Fixed Asset Register hinder physical verification process for fixed assets
- Without proper tracking systems, assets can be lost, stolen, or misplaced, particularly in large organizations with multiple locations leading to financial loss and operational disruption
- Improper recording/managing of fixed assets may lead to underutilization of assets and the organization might end up purchasing new equipment when existing assets could have been redeployed more effectively.
- Without clear data on the current assets' condition and usage, the organization may end up in inefficient capital allocation which will limit the organization’s ability to invest in growth or other strategic areas.
- Inadequate asset management can lead to inaccurate or incomplete insurance coverage, if assets are not properly recorded or valued. The organization may either underinsure or overinsured the value of the asset.
- Lack of data to develop the fixed register during ERP implementation
- Improper Fixed asset management will lead to difficulty in allocation of depreciation on Cost / Profit center basis and may also affect quantification of Fixed Asset write-off during lease exits, branch closure, de- mobilization etc.
- Neglecting maintenance and inspections due to poor asset management can result in safety hazards.
- As the organization grows, the inability to manage and scale asset tracking processes can become a bottleneck and can hinder expansion efforts.
Below are our offerings to improve Fixed Asset Management:
- Development of Fixed Asset Policies and Procedures: To create comprehensive policies and procedures to set clear guidelines throughout asset lifecycle (from acquisition through disposal).
- Implementing Asset Management Software & Training: For implementation and vendor evaluation of centralized fixed asset management platform that can automate asset tracking, monitor depreciation, and generate maintenance schedules. We also assist in training of employees on effective usage of asset management systems to maintain accurate records.
- Physical verification of Fixed Assets: In conducting physical verification of fixed assets to ensure the accuracy of asset records and to confirm their existence, condition, and value.
- Barcoding or RFID Tracking: Helps in tagging of assets that track the location and status of assets in real-time and monitor the asset movements and existence
- Identification of variations and reconciliation of positive and negative variations arise due to reasons like refurbishments of existing facilities, repositioning, transfers, disposal of assets etc.
Our solutions will help organizations to ensure they maintain control over their assets, optimizing their usage and safeguarding financial health.
