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5 Ways to Overcome Fixed Asset Management Challenges

5 Ways to Overcome Fixed Asset Management Challenges

When a company is growing, reporting and tracking systems can sometimes lag the growth, leading to gaps in recorded data as new systems are required to manage the increased complexity. Companies which have grown at a rapid pace often find themselves at a loss to account for the location and utilization of multiple fixed assets. Tagging ownership, life, asset value generated etc. become extremely complex if a tracking system for fixed assets is not in place. A rationalization exercise to reconcile the various assets in the organization with the list available in the finance or administration departments needs to be conducted periodically. Smaller companies usually track their fixed assets through simple spreadsheets, which may fall well short of the requirements when dealing with complex machinery and aspects of finance like component assets.

To overcome this, an automation product coupled with an integrated solution is the best thing that can be done for fixed asset management. Mostly, businesses with multi-locations struggle more than any other organization due to the nature of the business being geographically widespread. If your organization is facing these challenges while maintaining and keeping record of fixed assets with different sub-ledgers and processes, the following tips are for you.

Here is a list of various kinds of challenges faced when attempting an asset reconciliation exercise:

  • Multiple Spread sheets with poor version tracking.

  • No requirements clearly defined or built into Spread sheets, leading to missing data.

  • Email or document attachments lost in email.

  • Set deadlines for month end, quarter end, and year-end audits and verification.

  • Inconsistent formatting in data reporting.

  • Taxation or penalty implications due to incorrect reporting.

  • Risk of lack in accountability or ownership tracking

Some of the simpler ways to ensure compliance rules are met and the necessary tracking of fixed assets is in place can be done by the use of the following:

  1. Verification of the Policies and Procedure Manuals: If new software has been implemented then in most cases the procedure manuals and policies remain the same and it could create problems if not verified and changed at the right time. Therefore, ensuring the policy and product manuals are up-to-date is a requirement that will ensure easier tracking.

  2. Review of all systems and spread sheet templates: A spread sheet could have been created a long time ago and the data in it could be obsolete. Everything needs to be brought on the same page and training needs to be given for the same. An automated tool needs to be thought about that is simple to use and will keep everyone on the same page. These tools should be capable of renaming the fields, create drop down lists, lock down the fields or create user profiles that can limit certain types of functionalities.

  3. Time Frame: Many hours are spent each month at each location to finalize and provide an ‘accurate’ record of fixed assets. The process needs to speed up and most importantly minimize the errors. Reliable, simple and efficient solutions that are easy to adopt and scale to the business requirements with limited effort are the need of the hour. These should also easily integrate and interface with financial accounting products for easy transfer of data.

  4. Frangibility: Fixed Assets are constantly moving in a flow and need to be updated and monitored to track them correctly. The more the organization grows, the more the assets that come in, especially with multiple locations and multiple users. It’s important that each location is consistent with the other to have a clear picture of the whole organizational assets.

  5. Updated Reports: Each and every report should be in sync with the other reports of the multiple locations. Spread sheets can be in depth but it can’t create accurate reports for which, fixed asset management software is needed. The more the consistent data can be, the more visibility in understanding the current situation of the assets.

Each of the above points underlines the need for flexible and scalable fixed asset management software that can help companies stay on top of their tracking and compliance requirements for fixed assets. To know more about Tracet Fixed Asset Management Solution, contact us at info@tracet.in or fill out the form below.

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