Physical Verification of Fixed Assets

Physical Verification of Fixed Assets

While assets can be recorded in books, their physical presence is also recorded periodically by auditors in order to verify their presence. In case of larger companies, the complexity and distribution of assets like machinery across an organization can make it extremely difficult for the company to keep track of all of them. Asset tracking and utilization can be a significant value addition in ensuring the profitability and growth of an enterprise. The more efficient the use of the asset, the better the final output and results for the company. Therefore, robust resources need to be deployed to track and ensure the compliance of these resources in terms of both financial and operational parameters.

In companies where multiple classes of assets exist, and are widely dispersed across departments, offices and even people, keeping track of all of them can be a daunting task. This has been one of the top most priorities for the Finance and Admin teams as they are the caretakers of resource management. Therefore timely asset verification and records upkeep becomes critical.

It is mandatory for organizations to conduct an annual physical count of all the fixed assets to check for their depreciation, resale value, verifying the accuracy as there would be continuous addition and disposal of items regularly. Estimating the remaining utilization factor is something that is equally important to evaluate the life cycle of the particular product/ resource.

How do you conduct fixed asset verification?

Keeping a track and managing the fixed assets is critical and a compulsory periodic process that should be carried out in the organization. Maintaining a fixed asset register helps simplify the process.

A fixed asset register typically records the following data:

  • Net book value,

  • Current and accumulated depreciation rate,

  • Location of the asset,

  • Custodian rate,

  • Cost of the asset,

  • Asset use life or depreciation rate.

These can be maintained at department, business, location and corporate level and a periodic reconciliation is needed to ensure the veracity of these records. Ideally, a quarterly audit of movable fixed assets is recommended, though this can vary from industry to industry.

Dos and Don’ts in Physical asset verification

If you are planning to conduct physical asset verification, please keep the following points in mind.

Do’s for Physical Asset Verification:

  • Estimate and gather what you need to track or tag,

  • Understand the full project management life cycle,

  • Select software which can help you with reporting and analytics functionality,

  • Track assets as they get added in to the company,

  • Use a simpler barcoding system for allocating the unique identification number,

  • Choose who can provide best service for you,

  • Understand the difference between asset tracking and inventory tracking,

  • Conduct a critical equipment analysis,

Don’ts in Physical Asset Verification:

  • Don’t forget to complete the entry for current and future value of the asset

  • Don’t forget to check for consistency and categorization,

  • Don’t forget to define a strategic objective for the exercise

  • Don’t forget to create a comprehensive database

  • Don’t forget to eliminate unused or ghost assets

  • Don’t forget to track maintenance and repair schedules

Why you should consider Tracet for your Fixed Assets?

Having a suitable technology tool that can help your organization record and track fixed assets is a significant value addition.

Tracet, a Comprehensive Fixed Asset Management system, comes with the following features:

  • integrated barcode labelling technology which makes it easy to design your own asset tags,

  • Provides notification of overdue checkouts, expiring warranties, schedule maintenance, certification/calibration, and more,
  • Quick audits using any handheld with Barcode/ RFID scanner to ensure 100% asset compliance,

  • Automated check-in and check-out of assets to employees, vendors, or customers to ensure no assets get misplaced,

  • Effectively record scheduled or unscheduled maintenance entries and help keep full maintenance history of your assets,

  • Track assets by site, location, serial number, users.

With Tracet, you can track, manage and ensure compliance of your enterprise fixed assets across group companies or individual branches along with asset verification. With web based, mobile friendly and cloud ready Tracet solution address your fixed asset management difficulties. To know more, fill out the form below or connect with us at info@tracet.in

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